Investing.com - The U.S. dollar rose against its Canadian counterpart on Monday, re-approaching a six-week peak as expectations for a U.S. rate hike continued to support demand for the greenback and as investors eyed the release of U.S. manufacturing data due later in the day.
USD/CAD hit 1.2501 during early U.S. trade, the session high; the pair subsequently consolidated at 1.2488, gaining 0.30%.
The pair was likely to find support at 1.2390, the low of May 27 and resistance at 1.2537, the high of May 28.
The dollar remained broadly supported even after data showed that the U.S. economy contracted in the first quarter, as recent indications of a rebound in growth continued to fuel expectations for higher interest rates.
U.S. gross domestic product contracted at an annual rate of 0.7% in the first three months of the year, instead of the initial estimate of 0.2% growth the Commerce Department said. It was still better than economists’ forecast of a 1% contraction.
The loonie was steady against the euro, with EUR/CAD at 1.3694.
Preliminary data earlier showed that the German consumer price index ticked up 0.1% in May, in line with expectations and after a flat reading the previous month. Year-on-year, consumer prices rose 0.7%, as anticipated.
The report came after data showed that the euro zone manufacturing purchasing managers' index came in at 52.2, unchanged from March’s final reading and a 10-month high, but down slightly from the preliminary estimate of 52.3.
Weakness in the region’s core economies persisted, with France’s manufacturing sector still in decline and Germany registering only modest growth.
Meanwhile, concerns over the prospect of a Greek debt default continued to weigh since Athens warned last month that it will be unable to make the repayment if a cash-for-reforms deal with its international lenders.
Greece is due to make a €305 million payment to the International Monetary Fund on June 5.