US dollar advanced to a session high against its Canadian counterpart on Tuesday as the greenback firmed its positions after the release of US inflation data in line with preliminary estimates.
USD/CAD hit 1.0215 during the early hours of US trade, currently the session high and highest since June 13th, after which consolidation followed at 1.0203. The cross was up by 0.19% for the day. Support was likely to be received at Mondays low, 1.0148, while resistance was to be met at June 11th high, 1.0250.
US dollar received support after consumer inflation data from the United States met experts expectations and gave the Federal Reserve Bank a leeway to keep its bond purchasing program.
It became clear that annual US Consumer Price Index (CPI) rose to 1.4% in May from 1.1% a month ago, while the Core Consumer Price Index (CPI) stood at 1.7% during May, confirming the data from April.
Housing Starts in the United States increased in May to 0.914 million units, below projections of 0.950 million, while revised data during April showed 0.856 million units. On the other hand, US Building Permits recorded a smaller number in May, 0.974 million units, which was a slight estimate mismatch. Revised data during the preceding month pointed 1.005 million units.
Meanwhile, investors were focusing on Wednesday’s highly anticipated FED meeting for clues on monetary policy, after last month FED Chairman Ben Bernanke said that the bank could begin tapering asset purchases at some of the future meetings, if economic conditions were sufficiently good.
Canadian dollar was slightly lower against the euro as well, as EUR/CAD pair rose by 0.12% to 1.3631.
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