FRX: USD/CAD steady close to 3-month low after strong U.S. data
Forexpros - The U.S. dollar was little changed against the Canadian dollar on Thursday, hovering just above a three-month low, despite the release of upbeat U.S. data on trade and employment and weaker-than-forecast Canadian data.
USD/CAD hit 0.9931 during early U.S. trade, the pair’s lowest since May 8; the pair subsequently consolidated at 0.9941, dipping 0.01%.
The pair was likely to find near-term support at 0.9922, the low of May 8 and resistance at 0.9988, Wednesday’s high.
The pair remained steady after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. declined to 361,000 last week, from an upwardly revised 367,000 in the previous week, against expectations for an increase to 370,000.
A separate report showed that the U.S. trade deficit dropped to USD42.9 billion in June, its lowest level in two-and-a-half years, from a downwardly revised USD48.0 billion the previous month.
Analysts had expected a U.S. trade deficit of USD47.5 billion in June.
The Canadian dollar shrugged off data showing that the domestic trade deficit unexpectedly increased to CAD1.8 billion in June, from an upwardly revised CAD0.9 billion the previous month.
Analysts had forecast a Canadian trade deficit of CAD1.0 billion in June.
A separate report showed that Canadian housing starts fell more-than-expected in July.
The Canadian dollar remained supported after Bank of Canada Governor Mark Carney said Wednesday that the country’s economy was in a "very different place" than many of its global counterparts and indicated that the central bank may raise interest rates in the coming months.
The loonie, as the Canadian dollar is also known, was trading close to a record high against the euro, with EUR/CAD down 0.59% to 1.2219.
Sentiment on the euro was hit as optimism that the European Central Bank will soon move to cut high Spanish and Italian borrowing costs faded.
The ECB said in its monthly bulletin earlier that the economic outlook for the region faced a number of downside risks, with financial market tensions and their potential impact on growth posing the key threats.
