Forex — USD/CAD hits 3-week highs on US data, rate hike talk

Greenback higher vs. loonie in early trade — The U.S. dollar rose to three-week highs against its Canadian counterpart on Wednesday, helped by the release of positive US data and the prospect of a rate hike in December by the Federal Reserve.

USD/CAD was up 0.19% at 1.2374 from 09:30 a.m. ET (13:30 GMT), the highest since the 6 September.

The greenback found support after the Commerce Department said that durable goods orders rose more than expected in August, recovering from a slump in the previous month, and the strengthening of optimism about the US economy.

In a speech on Tuesday, Fed Chairman Janet Yellen said that the Federal Reserve must continue to be increases in step-wise interest rates despite uncertainty about the path of inflation.

It would «be unwise to keep the monetary policy until the inflation, she said again to 2%»,.

The US dollar also gained ahead of an anticipated US-tax-plan that will be presented on Wednesday. The plan was developed over several months, the six White house and congressional Republicans, with no input from Democrats.

The loonie was higher against the euro, with EUR/CAD sliding 0.41% to 1.4506.

Investors were yet the fact that German Chancellor Angela Merkel before the start of months of coalition talks to try to form a stable government digest.

The political risk in Spain also weighed on the single currency, with the Catalan government to hold a referendum it plans to hold, whether to break away from Spain on Sunday, despite the opposition of the Spanish authorities.

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