Investing.com - The Canadian dollar rose against the U.S. dollar on Monday as oil prices rose and after data showing that while U.S. consumer spending ticked higher in February a measure of inflation eased.
USD/CAD was down 0.49% at 1.3202, off highs of 1.3283.
Oil prices edged higher amid hopes that a production freeze among major producers may be implemented to curb global oversupply.
Canada is a net exporter of oil and the risk sensitive Canadian dollar is affected by fluctuations in oil prices.
Trading conditions remained light, with financial markets in Europe closed for the Easter holiday.
In the U.S., the Commerce Department reported that personal spending edged up 0.1% in February, in line with economists’ expectations.
Personal income rose by a seasonally adjusted 0.2%, above forecasts for a 0.1% gain.
Inflation as measured by the PCE index, the Federal Reserve’s preferred inflation measure, dipped 0.1% last month, due in large part to lower energy costs
The PCE index rose just 1% on a year-over-year basis, slowing from 1.2% in January.
The data indicated that the Fed may raise interest rates only gradually this year, despite the tightening labor market.
Investors were looking ahead to a speech by Fed Chair Janet Yellen on Tuesday for fresh indications on the path of interest rates.
Higher interest rates would boost the dollar by making it more attractive to yield seeking investors.
The dollar has strengthened in recent sessions after an upward revision to U.S. fourth quarter growth and hawkish comments by Fed officials bolstered expectations that the central bank may act soon to hike interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.31% at 95.87, off earlier of highs of 96.42.