Investing.com - The U.S. dollar weakened against its Canadian
counterpart on Friday after soft U.S. factory data and dovish
comments from Federal Reserve Chair Nominee Janet Yellen fanned
expectations for monetary stimulus tools to stay in place into
Soft Canadian factory sales figures cushioned the greenback's
losses and kept the pair range bound.
In U.S. trading on Friday, USD/CAD hit 1.0452, down 0.14%, up from
a low of 1.0450 and off a high of 1.0485.
The pair sought to test support at 1.0441, Thursday's low, and
resistance at 1.0526, Thursday's high.
The Federal Reserve reported earlier that U.S. industrial
production edged down 0.1% in October after expanding 0.7% in
Analysts were expecting a 0.2% expansion, and the surprise
contraction weakened the dollar by fanning sentiments the Fed won't
scale back its USD85 billion in monthly bond purchases until early
Bond purchases aim to spur recovery by driving down long-term
interest rates, weakening the dollar in the process.
On Thursday, Fed Chair Nominee Janet Yellen told the Senate Banking
Committee that while the economy is on the mend, inflation and
unemployment rates have room to move closer to Fed comfort zones,
which markets interpreted as a sign the U.S. central bank wants to
see consistent improvements to economic indicators before winding
down stimulus tools.
Her comments put to rest lingering expectations that the Fed may
announce plans to scale back stimulus tools at its December
Also in the U.S., the Federal Reserve of Bank of New York said its
manufacturing activity index declined to -2.21 in November from
1.52 in October, defying expectations for a rise to 5.00, which
added to the dollar's decline.
A separate report showed that U.S. import prices fell 0.7% in
October compared to expectations for a 0.4% decline after a
downwardly revised 0.1% rise the previous month.
Elsewhere, Statistics Canada reported that manufacturing sales rose
0.6% in September, missing market calls for a 1% increase after a
0.2% decline the previous month, which capped the loonie's advance
against the greenback.
The Canadian dollar, meanwhile, was down against the euro and up
against the yen, with EUR/CAD up 0.05% and trading at 1.4093 and
CAD/JPY up 0.39% at 95.93.
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