Investing.com - The U.S. dollar rose to four-and-a-half year highs against the Canadian dollar on Tuesday, as expectations that the Federal Reserve will continue to taper stimulus offset unexpectedly weak U.S. factory data.
USD/CAD hit 1.1177, the highest since July 2009 and was last up 0.44% to 1.1164.
The pair was likely to find support at 1.1080 and resistance at 1.1260.
Investors were anticipating Wednesday’s policy statement by the Fed amid expectations that the bank will cut its asset purchase program by another $10 billion, to $75 billion per month. The central bank announced the first cut to its stimulus program in December.
The greenback shrugged off data showing that U.S. orders for long lasting manufactured goods unexpectedly slumped in December.
Durable goods orders tumbled 4.3% last month the Commerce Department said, confounding expectations for a 1.8% gain. Orders for durable goods in November were revised to a 2.6% increase from a previously reported gain of 3.4%.
Core durable goods orders, excluding volatile transportation items, fell1.6% in December, the largest drop since March, compared to forecasts for a 0.5% increase.
Orders for core capital goods, a key barometer of private-sector business investment, fell 1.3% last month, confounding expectations for a 0.5% gain and after rising 2.6% in November.
The loonie, as the Canadian dollar is also known, remained under pressure after the Bank of Canada said last week it expects inflation to remain well below target for some time and left the door open to a rate cut.
Elsewhere, the loonie hit four-year lows against the euro, with EUR/CAD rising 0.45% to 1.5264.