Investing.com - The U.S. dollar extended the previous session’s strong gains against the Canadian dollar on Monday, touching the highest level in 20 months amid expectations that the Federal Reserve will start to wind down its asset purchase program this year.
USD/CAD hit 1.0554 during early U.S. trade, the pair’s highest since October 5 2011; the pair subsequently consolidated at 1.0544, advancing 0.81%.
The pair was likely to find support at 1.0469, the session low and resistance at 1.0656, the high of October 5 2011.
Demand for the greenback continued to be underpinned after Fed Chairman Ben Bernanke said last week the bank could begin slowing asset purchases by the end of this year and wind them down completely by the middle of 2014 if the economy continues to pick up.
Safe haven demand for the greenback was also boosted by concerns over financial stability in China, after the People’s Bank of China said lenders must meet higher requirements in liquidity management.
The Canadian dollar remained under pressure official data on Friday showed that Canadian consumer inflation rose less-than-expected in May, and Canadian retail sales came in below expectations in April.
Canadian consumer price inflation rose 0.7% compared to a year earlier in May, compared to forecasts for a 1% increase, while core inflation was 1.1% year-over-year, in line with expectations.
A separate report showed that retail sales rose 0.1% in April, below expectations for a 0.2% increase.
The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD rising 0.44% to 1.3787.
Sentiment on the euro remained fragile as peripheral euro zone bond yields continued to grind higher on Monday amid concerns over the prospect of an end to the Fed’s stimulus program.
The single currency showed little reaction after a report showed that the Ifo index of German business climate improved to 105.9 in June from 105.7 in May, in line with market expectations.
USD/CAD hit 1.0554 during early U.S. trade, the pair’s highest since October 5 2011; the pair subsequently consolidated at 1.0544, advancing 0.81%.
The pair was likely to find support at 1.0469, the session low and resistance at 1.0656, the high of October 5 2011.
Demand for the greenback continued to be underpinned after Fed Chairman Ben Bernanke said last week the bank could begin slowing asset purchases by the end of this year and wind them down completely by the middle of 2014 if the economy continues to pick up.
Safe haven demand for the greenback was also boosted by concerns over financial stability in China, after the People’s Bank of China said lenders must meet higher requirements in liquidity management.
The Canadian dollar remained under pressure official data on Friday showed that Canadian consumer inflation rose less-than-expected in May, and Canadian retail sales came in below expectations in April.
Canadian consumer price inflation rose 0.7% compared to a year earlier in May, compared to forecasts for a 1% increase, while core inflation was 1.1% year-over-year, in line with expectations.
A separate report showed that retail sales rose 0.1% in April, below expectations for a 0.2% increase.
The loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD rising 0.44% to 1.3787.
Sentiment on the euro remained fragile as peripheral euro zone bond yields continued to grind higher on Monday amid concerns over the prospect of an end to the Fed’s stimulus program.
The single currency showed little reaction after a report showed that the Ifo index of German business climate improved to 105.9 in June from 105.7 in May, in line with market expectations.