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USD/CAD climbs toward 1.4200 amid firm USD and Fed hawkishness
The move follows a Fed projection of another rate increase by year end after a 25 bps hike earlier this month, with US yields at multi-year highs supporting the dollar.
The USD/CAD pair extended its three-week upward trend in the Asian session, rising to its highest level since July 9 and moving closer to the 1.4200 area, according to FXStreet.
FXStreet attributed the dollar strength to a bullish USD, with the US Dollar Index holding near a two-month high after the Federal Reserve signaled another rate increase by the end of the year following a widely expected 25 basis points hike earlier this month.
The outlet also pointed to energy driven inflation fears that reinforced expectations for further tightening, a backdrop that has pushed US bond yields to multi-year highs.
FXStreet added that ongoing geopolitical uncertainty tied to the US Iran standoff supported the safe haven US dollar, citing the US president’s rejection of an Iranian proposal related to reopening the Strait of Hormuz on Iran’s terms.
Latest closeDollar index 101.25 ▲0.3%