Forex – USD/CAD slides lower, approaches more than 2-year trough

© Reuters. Greenback moves close to multi-year lows vs. loonie – The U.S. dollar slid lower against its Canadian counterpart on Tuesday, approaching a more than two-year trough as concerns over tensions with North Korea persisted and as climbing oil prices lent support to the commodity-related Canadian currency.

USD/CAD was down 0.32% at 1.2373 by 09:30 a.m. ET (13:30 GMT).

Investors remained cautious after North Korea conducted its sixth and largest ever nuclear test on Sunday, prompting U.S. Defense Secretary James Mattis to say that any threat to the U.S. or its allies would be met with a “massive military response”.

On Monday, South Korea said its northern neighbor had been observed moving what appeared to be an intercontinental ballistic missile towards its west coast.

Meanwhile, the United Nations was said to be considering tougher economic sanctions against North Korea.

Meanwhile, oil prices moved sharply higher on Tuesday, as U.S. refineries began to resume operations, boosting demand for the commodity-linked Canadian dollar.

The loonie was higher against the euro, with EUR/CAD declining 0.38% to 1.4714.

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