Investing.com - The U.S. dollar held steady against its Canadian counterpart on Wednesday, hovering close to one-year highs as expectations for a sooner than expected U.S. rate hike lent broad support to the greenback.
USD/CAD hit 1.1014 during early U.S. trade, the session high; the pair subsequently consolidated at 1.0983, inching up 0.03%.
The pair was likely to find support at 1.0937, the low of August 26 and resistance at 1.1031, Tuesday's high and a more than one-year high.
Expectations that the Fed is growing closer to raising interest rates have continued to support demand for the greenback.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
A study by the San Francisco Federal Reserve published on Monday indicated that Fed officials see rates rising earlier than markets expect.
The Canadian dollar came under pressure on Tuesday, after data showed that the annual rate of housing starts fell to 192,400 units last month from July’s total of 199,800 units. Analysts had expected Canadian housing starts to decline to 195,000 units in August.
The loonie remained within close distance of a 10-month peak against the euro, with EUR/CAD shedding 0.28% to 1.4169.
The euro remained weaker after the European Central Bank unexpectedly cut rates to record lows across the euro zone last week and unveiled new easing measures in a bid to shore up the faltering recovery and boost inflation.