On Tuesday, the greenback edged higher against its Canadian counterpart, supported by the release of a strong U.S. economic progress report, although disappointing data from Canada weigh up on the local currency.
USD/CAD hit 1.3481 during early U.S. trade, the session peak and the pair then consolidated at 1.3459, increasing 0.37%.
The pair was expected to find support at 1.3373, the low of November 22 and resistance at 13542, the peak of November 28.
Official data indicated that the second estimate of 3rd quarter U.S. gross domestic product increases 3.2%, up from the first reading of a 2.9% expansion.
Analysts were looking for a smaller upward revision to just 3.0%.
The upbeat data added to positivity over the viewpoint for the U.S. economy during anticipations that increased fiscal spending and tax reduction under the Trump administration will spur economic progress and inflation.
The strong report also added to expectations that the Fed Reserve will choose to increase interest rates at its December policy meeting.
In Canada, data on Tuesday indicated that the current account deficit reduces to C$18. 3 billion in the 3rd quarter from C$19.0 billion in the 2nd quarter, whose number was revised from a previously estimated deficit of C$19.9 billion.
Analysts had anticipated the latest account deficit to reduce to C$16.8 billion in the last quarter.
The loonie was lower compared to the euro, with EUR/CAD up 0.11% at 1.4248.
On Additional News
The dollar pared earlier losses against the yen and euro and inched up on Wednesday, as U.S. debt yields restarted their increase.
However, as traders prepare for a meeting by the Organization of the Petroleum Exporting Countries (OPEC) later in the day, the greenback’s increased were limited, which could spark volatility in financial markets and weigh on the U.S. currency.
The dollar increase 0.3% to 112.690 yen after going as low as 112.060.
It increased to 113.340 suddenly on robust review U.S. GDP data, but had failed to withstand the increase as U.S. yields, , a key driver of the dollar lately, initially pulled back from 16-month peaks before increasing in Asia on Wednesday.
The euro declined 0.2% in $1.0632 following an increase to $1.0660. It had increased 0.3% overnight.
In November, the dollar has increased 7% against the yen and increase 3% against the euro. It increased as Donald Trump’s U.S. election win drove Treasury yields higher on expectations for increasing fiscal spending, higher inflation and a faster pace of monetary tightening by the Fed Reserve.
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