Investing.com - The U.S. dollar was higher against its Canadian counterpart on Monday, boosted by hopes for a September rate hike by the Federal Reserve, while downbeat data from Canada weighed on the local currency.
USD/CAD hit 1.3298 during early U.S. trade, the session high; the pair subsequently consolidated at 1.3296, climbing 0.73%.
The pair was likely to find support at 1.3163, Friday's low and resistance at 1.3350, the high of August 26.
The greenback found support after Fed Vice Chairman Stanley Fischer said Friday it was still too early to decide whether to raise interest rates from near zero at the bank’s September meeting.
Investors were looking ahead to Friday’s U.S. jobs report for August, which could help to provide clarity on the likelihood of a near-term interest rate hike.
In Canada, data on Monday showed that the current account deficit narrowed to C$17.4 billion in the second quarter from C$18.2 billion in the first quarter, whose figure was revised from a previously estimated deficit of C$17.5 billion.
Analysts had expected the current account deficit to narrow to C$16.9 billion in the last quarter.
The loonie was sharply lower against the euro, with EUR/CAD rallying 1.23% to 1.4945.
The single currency found support after data on Monday showed that euro zone consumer price inflation rose by 0.2% last month, above expectations for a gain of 0.1% and following a 0.2% increase in July.
The rate has now been below 1% for 21 straight months, well under the European Central Bank's target of near but just under 2%.
Core CPI, which excludes food, energy, alcohol, and tobacco costs increased by 1.0% in August, matching forecasts and unchanged from July.