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Forex - USD/CAD at 6-year highs after Canadian data

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Investing.com -

Investing.com - The U.S. dollar edged up to six-year highs against its Canadian counterpart on Monday, as expectations for an upcoming U.S. rate hike continued to support the greenback, while downbeat wholesale sales data from Canada weighed on the local currency.

USD/CAD hit 1.2999 during early U.S. trade, the daily high; the pair subsequently consolidated at 1.2995, adding 0.18%.

The pair was likely to find support at 1.2900, the low of July 16 and resistance at 1.3007, Friday's high and a six-year high.

Demand for the dollar remained supported after upbeat data on Friday fuelled further expectations for a U.S. rate hike in the near future.

Data on Friday showed that the U.S. consumer price index rose 0.3% in June, while consumer prices ticked up by 0.1% last month on a yearly basis.

A separate report showed that U.S. housing starts rose 9.8% to 1.174 million units in June, compared to expectations for an increase of 6.2%.

U.S. building permits rose 7.4% to 1.343 million units last month, confounding expectations for a 11.8% drop.

The data came after Federal Reserve Chair Janet Yellen said, in testimony before the House Financial Services committee, that the Fed is likely to raise rates "at some point this year." She added that the U.S. labor market healthier but "still some slack."

In Canada, data on Monday showed that wholesale sales declined by 1.0% in May, compared to expectations for a 0.1% uptick. Wholesale sales rose 1.7% in April, whose figure was revised from a previously estimated 1.9% gain.

The loonie was lower against the euro, with EUR/CAD rising 0.24% to 1.4082.

The single currency found support as Greek banks reopened on Monday after a forced 3-week closure but restrictions on cash withdrawals were to remain. In a decree Saturday, the Greek government kept the daily cash withdrawal limit at €60 but added a weekly limit of €420.

The decree came on the same day as Greece's coalition government swore in its new, reshuffled cabinet. Five prominent dissidents from the Syriza party, the senior coalition party, were replaced.

On Friday, German lawmakers voted in favour of opening discussions on Greece's third bailout and the European Union decided to release a short-term loan of €7.16 billion to help Greece pay back a loan due Monday to the European Central Bank.

The Greek Parliament was scheduled to vote on further austerity measures on Wednesday.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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