Investing.com - The U.S. dollar rose to more than five year highs against the Canadian dollar on Wednesday as lower global oil prices continued to pressure the Canadian currency lower.
USD/CAD hit highs of 1.1467, the most since July 2009 and was last up 0.20% to 1.1432.
Global oil prices fell sharply after top exporter Saudi Arabia announced Tuesday that it was cutting prices to the United States, in an attempt to shore up its share of the American market.
Oil prices also remained under pressure from the broadly stronger greenback, which has rallied since the Federal Reserve announced the conclusion of its quantitative easing stimulus program.
The Canadian dollar came under additional selling pressure after Bank of Canada Governor Stephen Poloz said Tuesday that falling oil prices would limit economic growth, before adding that Canada needs low interest rates to deal with the “headwinds” of a weak global economy.
Crude oil is Canada’s largest export and the Canadian dollar is very sensitive to fluctuations in oil prices.
Meanwhile, the U.S. dollar made broad gains on Wednesday as the results of U.S. mid-term elections were seen as positive for the economy.
The Republican Party took control of the U.S. senate and extended their majority in the House of Representatives, riding a wave of voter dissatisfaction with President Barack Obama’s party at the polls.
The result boosted hopes for an end to political deadlock in Washington.
The greenback received an additional boost after data on Wednesday showed that the U.S private sector added more jobs than expected last month.
Payroll processor ADP reported that the U.S. private sector added 230,000 jobs last month, ahead of expectations for jobs growth of 220,000. September’s figure was revised up to 225,000.
The Institute of Supply Management was to release data on service sector activity later in the trading day.