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Forex - Canadian dollar higher as oil prices regain ground

Published 06/26/2017, 09:36 AM
Updated 06/26/2017, 09:36 AM
© Reuters.  Canadian dollar higher as oil prices regain ground

© Reuters. Canadian dollar higher as oil prices regain ground

Investing.com - The Canadian dollar rose on Monday against its broadly weaker U.S. counterpart as prices for oil, a major Canadian export, regained ground.

USD/CAD was down 0.35% at 1.3221 by 09.30ET.

Oil prices rose for the third straight session on Monday, pulling away from a seven-month low hit last week.

The greenback remained on the back foot after data showing that U.S. durable goods orders fell again in May underlined doubts over whether the Federal Reserve will raise interest rates again later this year.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last down 0.13% to 96.86, adding to Friday’s losses when it fell 0.37%.

The Commerce Department reported that U.S. durable goods orders unexpectedly fell by 1.1% in May after declining 0.9% in April, pointing to a loss of momentum in the manufacturing sector.

The greenback was already under pressure after recent lackluster economic reports raised questions over the Fed’s plans to tighten monetary policy.

The Fed raised interest rates for the second time this year earlier in June and stuck to its projection for one more rate hike this year despite the subdued inflation outlook, but investors think the pace of its tightening will be much slower than policymakers want.

Futures traders are pricing in less than a 15% chance of a hike at the Fed's September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 35%.

Investors were looking ahead to a speech by Fed Chair Janet Yellen on Tuesday for fresh indications on the path of interest rates and the Fed’s plans to trim its balance sheet.

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