The Canadian dollar turned lower against its U.S. counterpart on Today, pulling away from Friday’s 10-month peaks as prices for oil, a major Canadian export, fell.
USD/CAD was at 1.2902 by 08.30 AM ET, after rising as high as 1.2933 earlier.
Oil prices slid lower on Today, adding to heavy losses from the end of last week as persistent concerns over a global supply glut continued to weigh.
Demand for the greenback continued to be underpinned after Friday’s stronger-than-forecast U.S. jobs report indicated that the Federal Reserve would stick to plans for a third rate hike this year.
The rapid pace of jobs growth reassured investors that the economy is on a strong enough footing to justify the Fed’s plans to raise interest rates once more this year.
The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but concerns over subdued inflation outlook had raised doubts over whether officials would be able to stick to their planned tightening path.
The loonie remained supported ahead of the upcoming Bank of Canada meeting on Wednesday amid heightened expectations for a rate increase.
Chances for a rate hike were boosted after data on Friday showing that the Canadian economy added more jobs than expected in June.
Expectations for a rate hike have been rising since senior BoC officials said last month that a pair of rate cuts in 2015 had done their job in cushioning the economy from the steep fall in oil prices.