The Canadian dollar was higher against its U.S. counterpart on Tuesday, re-approaching Friday’s nine-month peaks boosted by the newly hawkish tone of the Bank of Canada.
Expectations for a rate hike by the BoC as early as next month mounted following hawkish comments by central bank head Stephen Poloz last week.
Data on Friday showing that Canada’s economy expanded for the sixth consecutive month in April were seen as underlining rate hike expectations.
Statistics Canada said gross domestic product expanded by 0.2%, in line with forecasts.
Trade volumes were expected to remain thin on Tuesday with U.S. markets closed for the Independence Day holiday.
Canadian financial markets were closed on Monday for the Canada Day holiday.
Meanwhile, prices of oil, a major Canadian export edged lower on Tuesday, snapping eight days of gains as investors took profits ahead of the U.S. holiday.