The U.S. dollar rose against its Canadian counterpart on Wednesday, as declining oil prices continued to weigh on demand for the commodity-related Canadian currency, while investors eyed the release of U.S. home sales data later in the day.
The Canadian dollar weakened as oil prices slipped below $31 a barrel on Wednesday after Saudi Arabia’s oil minister said that production cuts “will not happen”.
Separately, Iran also said it had no interest in reducing production after international sanctions against it were lifted, calling a joint Russian/Saudi proposal for major exporters to freeze output “laughable”.
Meanwhile, Richmond Federal Reserve President Jeffrey Lacker said on Wednesday that the case for a rate hike was bolstered by recent data and that the U.S. central bank should concentrate on fostering economic growth via its control of inflation.
The comments came after Fed Vice-Chairman Stanley Fischer said that Fed officials ” simply do not know” what course of action they will take at their next meeting in March
The pound extended losses on Wednesday, falling to fresh seven-year lows against the dollar as concerns over the economic impact of a British exit from the European Union mounted.
Sterling has now lost 3.4% so far this week after Britain’s Prime Minister David Cameron announced that a referendum on EU membership will take place on June 23.
Several senior members of his Conservative party, including London Mayor Boris Johnson, have said they will be backing the campaign to leave the EU, in a blow to the prime minister’s plans to remain in the bloc.
Cabinet ministers continued to clash over the referendum on Wednesday after Justice Secretary Michael Gove said a new deal agreed between Britain and Brussels to keep Britain in the EU is not legally binding.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% to 97.71.