The Loonie hit its highest level in one week against the Canadian dollar in early trading on Monday as weak crude oil prices weighed on the commodity currency pair; traders also got ready for the Federal Reserve’s policy announcement on Wednesday, where it is widely likely to signal an earlier end to its asset purchases.
Today, the USDCAD pair rose to 1.2765 up from Friday’s close of 1.272. The Canadian dollar hit its lowest level in over two months last week. After gaining about 2.3% in October, the loonie weakened over 3.1% last month.
Traders are looking forward to the Federal Reserve’s key meeting later this week. At the time of writing, the dollar index, which measures the value of the dollar against six foreign currencies, was trading 0.23% higher at 96.318.
On Wednesday, the Fed will likely announce an increase of its bond-buying program. Fed’s decision may also be influenced by consumer price inflation data, which hit nearly 40 years high in November.
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