The U.S. dollar was higher against its Canadian counterpart on Monday, after disappointing U.S. industrial production, although hopes for a U.S. rate hike in the near future continued to support.
USD/CAD hit 1.2361 during early U.S. trade, the pair’s highest since June 9; the pair subsequently consolidated at 1.2342, up 0.29%
The Federal Reserve said that industrial production declined by 0.2% last month, disappointing expectations for a gain of 0.3%. Industrial production fell by 0.5% in April, whose figure was revised down from a previously reported drop of 0.3%.
The report came after the Federal Reserve Bank of New York said that its general business conditions index fell to -2.0 this month from a reading of 3.1 in May. Analysts had expected the index to rise to 6.0 in June.
Market participants were looking ahead to the outcome of the Fed’s latest policy meeting on Wednesday for a clear signal on when it could start to raise interest rates.
Upbeat data on U.S. consumer sentiment on Friday underlined expectations that the central bank could start to hike rates at its September meeting.
In Canada, data on Monday showed that manufacturing sales dropped 2.1% in April, compared to expectations for a 0.5% slip. The change in manufacturing sales in March was revised to a 2.7% increase from a previously estimated 2.9% rise.
The loonie was steady against the euro, with EUR/CAD at 1.3864.
Sentiment on the single currency remained fragile after talks in Brussels between Greece and European Union representatives failed to reach an agreement on pension reforms, budget targets, and tax rates, adding to fears over a debt default that would threaten Greece’s future in the eurozone.
Investors were looking ahead to a meeting of eurozone finance ministers on Thursday, which was being seen as Greece’s last chance to strike a deal.