Investing.com - The U.S. dollar rose to four-and-a-half year highs against the Canadian dollar on Thursday, buoyed up by growing expectations the Federal Reserve could hike interest rates earlier than previously thought.
USD/CAD hit 1.1277, the strongest level since July 2009 and was last up 0.21% to 1.1262.
The pair was likely to find support at 1.1200 and resistance at 1.1350.
The Fed said it would reduce its monthly bond purchases by an additional $10 billion to $55 billion at the conclusion of its two-day policy setting meeting on Wednesday.
The dollar rallied after Fed Chair Janet Yellen indicated that the bank could begin to raise interest rates about six months after the bond-buying program winds up, which is expected to happen this fall.
The comments prompted investors to bring forward expectations for a rate hike to as soon as April of next year.
However, the Fed statement also emphasized that economic conditions could mean that rates would remain on hold at record lows for some time, even after inflation and employment return to their longer-run trends.
Meanwhile, data on Thursday showed that U.S. initial jobless claims rose less-then-expected last week.
The Department of Labor reported that the number of people filing for initial jobless benefits in the week ending March 15 rose by 5,000 to 320,000 from the previous week’s total of 315,000. Analysts had expected jobless claims to rise by 10,000 last week.
Elsewhere, the loonie, as the Canadian dollar is also known, was trading close to five year lows against the euro, with EUR/CAD at 1.5516.