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Forex - USD/CAD trims gains but remains supported

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Investing.com -

Investing.com - The U.S. dollar trimmed gains against its Canadian counterpart on Monday, pulling back from a two-month high although expectations for an upcoming U.S. rate hike continued to support the greenback.

USD/CAD pulled back from 1.3436, the pair's highest since September 29, to hit 1.3381 during early U.S. trade, still up 0.23%.

The pair was likely to find support at 1.3265, Friday's low and resistance at 1.3458, the high of September 29.

Demand for the U.S. dollar continued to be underpinned by expectations that the Fed is on track to raise interest rates next month.

New York Fed President William Dudley said Friday that there is a "strong case" for hiking rates at the central bank's next meeting in December as long as economic data continues to remain solid.

Higher U.S. interest rates would make the greenback more attractive to yield-seeking investors.

The loonie was lower against the euro, with EUR/CAD edging up 0.16% to 1.4235.

The euro found support after research group Markit earlier reported that its euro zone composite purchasing managers' index, which measures the combined output of both the manufacturing and service sectors, rose from 53.9 in October to 54.4 in November.

It was the index's highest level in more than four years.

But gains were capped after European Central Bank President Mario Draghi said on Friday that the bank is ready to act quickly to boost inflation in the euro zone and can also change the level of its deposit rate to boost the impact of quantitative easing.

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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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