Forex - USD/CAD climbs to 3-week highs despite upbeat Canadian data

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Investing.com - The U.S. dollar climbed to three-week highs against its Canadian counterpart on Wednesday, as higher oil prices and a strong Canadian housing sector report failed to boost the local currency.

USD/CAD hit 1.2719 during early U.S. trade, the highest since July 14; the pair subsequently consolidated at 1.2711, gaining 0.36%.

The pair was likely to find support at 1.2627, Monday's low and resistance at 1.2716, Monday's high and a three-week high.

The greenback remained supported after data on Tuesday reinforced optimism over the strength of the U.S. job market sparked by Friday's positive nonfarm payrolls report.

The U.S. Labor Department said on Tuesday that the number of job openings, excluding the farming industry, settled at a record-high 6.163 million in June from 5.702 million a month earlier.

The strong numbers added to expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.

Investors were now eyeing U.S. inflation reports later in the week for indications of whether the recovery in the dollar is sustainable in the longer term.

Earlier Wednesday, the U.S. Bureau of Labor Statistics said in a preliminary report that nonfarm productivity rose 0.9% in the second quarter, exceeding expectations for an uptick of 0.7%.

The report also showed that unit labor costs edged up 0.6% in the three months to June, compared to expectations for a 1.2% gain.

At the same time, Statistics Canada said building permits increased by 2.5% in June, beating expectations for a 2.0% drop.

Building permits climbed 10.7% in May, whose figure was revised from a previously estimated rise of 8.9%.

A separate report showed that housing starts increased to 222,300 last month from 212,900 in June, whose figure was revised from a previously estimated 212,700 gain. Analysts had expected housing starts to hit 205,000 in July.

The commodity-related Canadian dollar also shrugged a rise in oil prices on Wednesday ahead of the highly-anticipated weekly U.S. supply report.

The loonie was steady against the euro, with EUR/CAD at 1.4882.

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