Investing.com - The Canadian dollar rose to the highest levels in three-weeks against its broadly weaker U.S. counterpart on Wednesday while higher prices for oil, a major Canadian export also lent support.
USD/CAD was down 0.76% to 1.3325 after falling as low as 1.3300 earlier, the lowest level since December 15.
The greenback pulled back from 14-year highs against a currency basket on Wednesday with investors wary of pushing the U.S dollar any higher before getting fresh signals on the strength of the economy and the expected pace of rate hikes in 2017.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.43% to 102.81.
The Federal Reserve is to publish the minutes of its December meeting, when it hiked interest rates for the first time in a year, at 14.00 ET and analysts will be examining them for any indications that officials are more upbeat on growth than the quarterly economic projections released following the meeting showed.
Analysts will also be looking for what Fed officials said about potential fiscal policy changes under the incoming Trump administration and how they may react to measures that could spur growth and inflation.
Traders are awaiting Friday’s U.S. nonfarm payrolls report for December for indications on solid growth in the labor market which could enable the Fed to keep pushing up interest rates.
The loonie, as Canada's currency is colloquially known, was boosted as oil prices pushed higher on the back of the weaker greenback and hopes that an agreement between major producers to cut production will be effective in reducing a global supply glut.
Higher prices for oil, one of Canada's major exports, typically boost the Canadian dollar.