Investing.com - The Canadian dollar edged higher against its U.S. counterpart on Monday even as prices of oil, a major Canadian export, fell amid oversupply concerns as investors looked ahead to the outcome of this week’s Federal Reserve meeting.
USD/CAD touched lows of 1.3439 and was at 1.3457 at 09.31 ET, off 0.1% for the day.
Oil prices struggled near four-month lows on Monday, as reports pointed to rising shale production and record-high U.S. crude inventories at a time when other major producers are curbing output in order to reduce a global supply glut.
The greenback remained slightly weaker ahead of the outcome of the Fed’s two-day policy meeting on Wednesday, with a rate hike almost fully priced in by markets.
Friday’s U.S. nonfarm payrolls report for February did little to alter expectations for a rate increase this week.
The Department of Labor reported that U.S. employers continued to hire workers at a solid pace and wages also rose, albeit at a slower pace than some economists had expected.
Futures traders are pricing in around a 90% chance of a hike at the Fed meeting, according to Investing.com’s Fed Rate Monitor Tool.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.2% at 101.18, after falling to two-week lows of 100.86 overnight.
The Canadian dollar gained ground against the greenback on Friday after solid domestic employment data for February tempered expectations for policy divergence between the Bank of Canada and the U.S. central bank.
Canada’s economy added 15,300 jobs last month, easily topping economists' expectations for a gain of 2,500.