Investing.com - The U.S. dollar rose to one-week highs against its Canadian counterpart on Wednesday, as renewed speculation over a possible June rate hike by the Federal Reserve boosted the greenback ahead of the minutes of the central bank’s latest meeting.
USD/CAD hit 1.2988 during early U.S. trade, the pair’s highest since May 9; the pair subsequently consolidated at 1.2978, climbing 0.54%.
The pair was likely to find support at 1.2829, the low of May 13 and resistance at 1.3014, the high of May 9.
Market participants were looking ahead to the minutes of the Fed’s most recent policy meeting, due later in the day, for indications on the timing of future interest rate hikes.
Expectations for an upcoming U.S. rate hike mounted after data on Tuesday showed that U.S. consumer prices rose at the fastest rate in more than three years in April.
Prices rose by 0.4% in April, the biggest one-month gain since February 2013, the Labor Department said on Tuesday.
Separate reports showed that housing starts and industrial production also rose strongly last month.
In addition, Atlanta Fed President Dennis Lockhart and San Francisco Fed President John Williams both said on Tuesday that there could be two or three rate hikes this year.
Meanwhile, the commodity-related Canadian currency weakened as oil prices turned lower after hitting seven-month highs on Tuesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories fell for a second straight week.
Separately, Statistics Canada reported on Wednesday that foreign securities purchases rose by C$17.17 billion in March, exceeding expectations for an increase of C$10.35 billion and after a C$15.94 billion rise the previous month.
The loonie was lower against the euro, with EUR/CAD adding 0.14% to 1.4628.
In the euro zone, official data earlier showed that consumer prices fell at an annual rate of 0.2% in April, in line with expectations.