Investing.com - The U.S. dollar rose near one-month highs against its Canadian counterpart on Tuesday, as tumbling oil prices dampened demand for the commodity-related Canadian currency.
USD/CAD hit 1.3158 during early U.S. trade, the pair’s highest since August 9; the pair subsequently consolidated at 1.3142, advancing 0.77%.
The pair was likely to find support at 1.3029, Monday’s low and resistance at 1.3191, the high of August 9.
The dollar recovered from losses posted after Federal Reserve Governor Lael Brainard warned against raising interest rates too quickly.
In a speech on Monday, Brainard says economic progress continues in the U.S., but the Fed would be wise to continue keeping policy loose.
The comments contrasted with Boston Fed President Eric Rosengren’s comments from last Friday saying that low interest rates are increasing the chance of overheating the U.S. economy.
Meanwhile, the Canadian dollar weakened as oil prices moved sharply lower after the Organization of the Petroleum Exporting Countries said on Monday that crude output from rival producers is stronger than expected and will result in a bigger supply glut than previously believed this year and next.
The loonie was lower against the euro, with EUR/CAD climbing 0.72% to 1.4758.
Earlier Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment was unchanged at 0.5 this month. Analysts had expected the index to rise by 2.0 points to 2.5 in September.
The index of euro zone economic sentiment advanced to 5.4 in September from 4.6 a month earlier, missing forecasts for a reading of 6.7.