USD/CAD Edges Higher on Hawkish Fed Comments, Oil Prices Weigh

The USD/CAD currency pair has been trading in positive territory near 1.4155 during early European trading hours on Monday, as the US Dollar edges higher against the Canadian Dollar due to hawkish Federal Reserve expectations.

Cleveland Fed President Beth Hammack said she is worried about persistently high inflation and its potential to condition the American public to accept elevated prices as normal. Meanwhile, Philadelphia Fed President Anna Paulson stated that 'some modest further tightening may be warranted.'

These comments have fueled speculation about additional interest rate increases, supporting the Greenback. Market expectations now see a 65% probability of a rate hike from the Fed when it meets next at the end of October.