Investing.com - The U.S. dollar rose to fresh six-month highs against its Canadian counterpart on Wednesday, as demand for the greenback remained supported by Tuesday's strong U.S. manufacturing data and expectations for a rate hike by the Federal Reserve.
USD/CAD hit 1.1107 during European afternoon trade, the pair's highest since September 15; the pair subsequently consolidated at 1.1102, adding 0.23%.
The pair was likely to find support at 1.0981, Tuesday's low and resistance at 1.1101, the high of September 15 and a six-month high.
The greenback remained underpinned after data on Tuesday showed that the U.S. manufacturing sector expanded in September, matching the rate of growth seen in the previous month, which was the strongest in over four years.
The strong added to expectations that the Fed will hike interest rates sooner than markets are expecting.
Meanwhile, demand for the Canadian dollar remained under pressure after a report on Tuesday showed that retail sales in Canada fell 0.1% in July to C$42.5 billion, compared to expectations for a 0.4% increase and following six consecutive months of gains.
The loonie was fractionally lower against the euro, with EUR/CAD easing up 0.08% to 1.4239.
The euro was hit after a report earlier showed that Germany's Ifo business confidence index deteriorated for the fifth successive month in September.
The Ifo economic institute's business climate index fell to 104.7 from 106.3 in August. It was the lowest level since April 2013 and much weaker than economists’ forecasts for 105.7.
Separately, European Central Bank President Mario Draghi said the bank will keep its monetary policy "accommodative for as long as needed, and will use every tool at its disposal to fight deflation.