Speculation about the U.S. dollar growing stronger in the near-term emboldened the Canadian dollar on Wednesday as the loonie marked a third-straight trading session of gains against its southerly rival, Bloomberg reports.
The U.S. Federal Reserve, led by chairman Ben Bernanke, is poised to reduce the amount of monetary easing during the coming months and would like to end the economy-spurring program by the end of the year, the chairman said last month. Minutes from the June Federal Open Market Committee meeting were scheduled for release on Wednesday afternoon.
In turn, the loonie would advance against the U.S. dollar, senior vice president John Curran with CanadianForex Ltd., told clients, according to Bloomberg.
"The risk is certainly to the downside for the U.S. dollar as this marginal pre-FOMC release selling of the U.S. dollar has shown," the senior vice president wrote, according to the news source. "We may not see enough detail to please expectations and an already long U.S. dollar crowd may want to ring the till on part of their trades."
Monetary units that are correlated with commodities, such as the Canadian dollar, were negatively impacted by China releasing weaker-than-expected data on Wednesday, according to The Wall Street Journal.
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