USD/CAD on six-week highs

US dollar managed to climb to six-week highs against its Canadian counterpart on Wednesday, as investors expected the minutes of Feds most recent meeting on policy later today.

USD/CAD hit its highest point at 1.0446 at 9:00 GMT, also the pairs highest since July 11th, after which consolidation followed at 1.0440. Support was likely to be received at current session low, 1.0388, while resistance was to be seen at July 11th high, 1.0470.

Later on trading Wednesday the Federal Reserve Bank will publish the minutes of its meeting on July 30-31st, as it may provide clues whether a reduction of scale of stimulus was on the horizon. The Federal Open Market Committee (FOMC) will conduct its next meeting on September 17-18th and will probably consider a pare back of its easing program at that meeting, according to 65% of economists, participated in a survey by Bloomberg News on August 9-13th.

“Markets are very focused on the big Fed announcement this afternoon, and that’s pushing the U.S. dollar higher versus the Canadian dollar,” said Blake Jespersen, managing director of foreign exchange at Bank of Montreal, by phone from Toronto, cited by Bloomberg. “We believe the Fed will start to taper in September and therefore we do expect the Canadian dollar to weaken down to C$1.06, C$1.07 in the next month or two.”

In addition, the United States was to release data on existing home sales within minutes.

Meanwhile, Canadian 2-year government bonds were little changed, as their yield reached 1.2%, before the Bank of Canada auctions 3.3 billion CAD (3.2 billion USD) of the debt on Wednesday.

Elsewhere, the loonie, as Canadian currency is also known, was lower against the euro, as EUR/CAD cross advanced 0.22% to trade at 1.3978 at 13:54 GMT. GBP/CAD pair was also gaining for the day, up by 0.61% to trade at 1.6386 at 13:54 GMT.