Investing.com - The Canadian dollar fell to two-week lows against the U.S. dollar on Wednesday, as concerns over slowing growth in China spurred risk aversion, bolstering demand for the greenback.
USD/CAD hit 1.1154, the highest since February 27 and was last up 0.29% to 1.1137.
The pair was likely to find support at 1.1070, Tuesday’s low and resistance at 1.1180.
Safe haven demand continued to be underpinned by worries over the outlook for China’s economy after data over the weekend showed that exports dropped 18.1% in February and inflation slowed.
The unexpectedly weak data raised fresh concerns over the strength of the world’s second-largest economy.
Investors were also on edge after China’s first domestic bond default last Friday fuelled fears over problems in the country’s financial sector.
Commodity prices were hit by concerns over weakening demand from China. Copper prices fell to the lowest level since 2010 and crude oil prices also weakened. Canada is a major exporter of crude and its dollar is sensitive to fluctuations in oil prices.
Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD up 0.47% to 1.5464.
The euro was boosted after European Central Bank executive board member Benoit Coeure said Wednesday the bank did not see an indication of deflation in the euro area, but it remained a possible risk.
The euro strengthened broadly after the ECB left interest rates at a record low 0.25% at its policy meeting last week and implemented no new policy measures to shore up growth, despite forecasting low inflation for years to come.
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