Investing.com - The U.S. dollar edged higher against its Canadian counterpart on Monday, trading within close distance of a more than 11-year peak although trading volumes remained thin ahead of the New Year holiday.
Global financial markets closed early on Thursday, Christmas Eve, and remained shut for Christmas Day on Friday.
Heading into the final week of the year, trading volumes are expected to remain light as many traders already closed books due to the holiday period, reducing liquidity in the market and increasing volatility.
USD/CAD hit 1.3890 during early U.S. trade, the pair’s highest since December 23; the pair subsequently consolidated at 1.3893, rising 0.28%.
The pair was likely to find support at 1.3792, Friday’s low and resistance at 1.3935, the high of December 23.
With the first U.S. rate hike since 2006 out of the way, investors were now focusing on the pace of future rate increases. The Federal Reserve, from its forecasts, is anticipating four rate hikes next year.
However, the Fed funds futures currently suggests there will be just two rate increases, one in June and one in December.
Mixed U.S. economic reports released last week failed to offer clues as to how fast the U.S. central bank will raise interest rates next year.
Meanwhile, the commodity-related Canadian dollar remained under pressure as oil prices continued to plummet.
The loonie was lower against the euro, with EUR/CAD adding 0.24% to 1.5246.