Forex – USD/CAD Approaches 3-Month High after Weak Canadian GDP Data

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© Reuters.  Greenback climbs against loonie after Canada GDP report© Reuters. Greenback climbs against loonie after Canada GDP report

Investing.com – The U.S. dollar approached a three-month high on Tuesday, after the release of weak Canadian economic growth data weighed on the local currency, while investors eyed the Federal Reserve’s upcoming policy meeting.

USD/CAD was up 0.48% at 1.2895 by by 09:40 a.m. ET (13:40 GMT), moving close to Friday’s three-month high of 1.2917.

The Canadian dollar weakened after official data showed that the economy unexpectedly contracted in August, after having stagnated in the prior month.

A separate report showed that Canada’s raw materials prices fell unexpectedly by 0.1% in September.

Meanwhile, investors were looking ahead to the Fed’s upcoming monetary policy statement on Wednesday for fresh indications on the path of rate hikes this year and Friday’s U.S. jobs report for October.

Trump is also expected to name his pick for the next head of the U.S. central bank on Thursday. Recent reports have indicated that Trump is likely to appoint Fed Governor Jerome Powell, who is viewed as more dovish than other candidates.

However, the dollar’s gains were capped by news President Donald Trump’s former campaign manager Paul Manafort was charged with money laundering by federal investigators.

Special Counsel Robert Mueller has also been investigating whether Trump obstructed justice in his firing of FBI Director James Comey.

Investors fear that the charges may divert Trump’s attention from his legislative agenda, which includes tax reforms.

The loonie was also lower against the euro, with EUR/CAD up 0.36% at 1.5003.

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