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Forex - USD/CAD trims gains ahead of FOMC decision

Investing.com -

Investing.com - The U.S. dollar trimmed gains against its Canadian counterpart on Wednesday, despite upbeat U.S. employment data, as investors remained cautious ahead of the Federal Reserve's upcoming policy decision and as higher oil prices supported the Canadian currency.

USD/CAD pulled away from 1.3094, the session high, to hit 1.3071 during early U.S. trade, still up 0.32%.

The pair was likely to find support at 1.2967, Tuesday's low and a four-month trough and resistance at 1.3125, Tuesday's high.

Payroll processing firm ADP said non-farm private employment rose by 246,000 last month, easily surpassing forecasts for an increase of 165,000. The economy created 153,000 jobs in December.

The greenback had tumbled on Tuesday, after Donald Trump's top trade adviser accused Germany of currency exploitation, saying it is using a "grossly undervalued" euro to exploit the U.S. and its trading partners.

In separate remarks, President Trump criticized Japan and China, saying they devalued their currencies to the disadvantage of the U.S.

The remarks indicated that the dollar exchange rate could have a prominent role to play in Trump's 'America First' agenda.

Meanwhile, the commodity-related Canadian dollar was supported by rising oil prices on Wednesday, ahead of the weekly report on U.S. stockpiles.

The loonie was higher against the euro, with EUR/CAD down 0.11% at 1.4052.

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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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