USD/CAD pared previous gains, still on positive ground

US dollar came off session highs against its Canadian peer on Tuesday, but remained still supported, as fears of a possible military campaign by the United States against Syrian government grew stronger.

USD/CAD reached a session high at 1.0538 at 8:00 GMT, also the pairs highest point since August 23rd, after which consolidation followed at 1.0511, adding 0.08% for the day. Support was expected to be received at August 22nd low, 1.0468, while resistance was to be met at August 23rd high and also a seven-week high, 1.0567.

Concerns over a military intervention against Syria arose, after US Defense Secretary Chuck Hagel said American forces were “ready” to commence their offensive, if President Barack Obama chooses to order an attack. These comments came after earlier today the US Secretary of State John Kerry said there was “undeniable” proof that the Syrian government had unleashed a chemical weapon upon the population.

Meanwhile, it became clear that US index of consumer confidence has risen unexpectedly in August, reaching a value of 81.5 up from 81.0 in July, confounding expectations of a drop to 79.0. The Conference Board reported that the index of economic expectations also rose to 88.7 in August from 86.0 in July. On the other hand, the index of current assessment diminished its value to 70.7 in August from 73.6, recorded a month ago. These results suggested that optimism among US consumers, regarding their business, employment and income outlook, has risen.

The dollar index added 0.2% for the day to reach 81.305 right after the release of the abovementioned indicator, after having fallen 0.4% to 81.155 earlier, following the report on house prices in 20 large cities in the United States. This report showed that house prices increased for another month during June, but at a more moderate pace. S&P and Case-Shiller reported that their index of house prices rose by 12.07% in June annually, while Mays value of the index was revised up to a 12.20% increase. Overall, the report showed a more cautious tone, suggesting that the rate of increase in house prices could slow down.