The U.S. dollar hit fresh 15-month highs against its Canadian counterpart on Tuesday, as investors awaited the Federal Reserve’s policy decision on Wednesday and as sentiment on crude oil remained vulnerable amid sustained supply glut concerns.
USD/CAD hit 1.3712 during early U.S. trade, the pair’s highest since February 2016; the pair subsequently consolidated at 1.3709, adding 0.22%.
The pair was likely to find support at 1.3634, Monday’s low and resistance at 1.4103.
Market participants were eyeing the Fed’s two-day policy meeting this week. While the central bank is widely expected to hold interest rates, investors were eyeing hints on the pace of future rate hikes.
The dollar also found some support after U.S. Treasury Secretary Steven Mnuchin said on Monday that economic growth of 3% is achievable in the next two years as the Trump administration is planning to dramatically cut taxes.
However, the Institute of Supply Management said on Monday that its manufacturing purchasing managers’ index fell to 54.8 in April from 57.2 the previous month, compared to expectations for a downtick to 56.5.
A separate report showed that U.S. personal spending was flat in March, confounding expectations for a 0.2% rise and after a 0.1% gain.
Meanwhile, the commodity-related Canadian dollar remained under pressure as concerns over rising U.S. oil production and the possibility that OPEC may terminate its output cut plan continued to weigh on oil prices.
The loonie was lower against the euro, with EUR/CAD rising 0.30% to 1.4954.