Forex - USD/CAD off 11-month highs in volatile trade

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Investing.com - The U.S. dollar pulled back from 11-month highs against the Canadian dollar in choppy trade on Thursday as better than expected U.S. jobless claims data boosted market sentiment.

USD/CAD retreated from 1.0393, the pair's highest since June 2012, to hit 1.0334 during early U.S. trade, down 0.31%.

The pair was likely to find support at 1.0250, Wednesday's low and resistance at 1.0393, the session high.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 23,000 to a seasonally adjusted 340,000, compared to expectations for a decline of 18,000 to 345,000.

Jobless claims for the preceding week were revised up to 363,000 from a previously reported increase of 360,000.

But investors remained cautious after Federal Reserve Chairman Ben Bernanke said the bank could begin tapering its bond-buying program.

In testimony to the U.S. Joint Economic Committee on Wednesday, Fed Chairman Bernanke said a decision to scale back the Fed's asset
purchase program could be taken in the "next few meetings" if economic data continued to improve.

Elsewhere, data showed that China's manufacturing sector contracted for the first time in seven months in May.

The preliminary reading of China's HSBC manufacturing purchasing managers' index fell to 49.6 in May, below the 50 level that separates contraction from growth down from a final reading of 50.4 in April.

The loonie, as the Canadian dollar is also known, was little changed against the euro, with EUR/CAD edging up 0.08% to 1.3343.

Earlier Thursday, data showed that the euro zone's manufacturing and service sectors improved more-than-expected in May.

The euro zone manufacturing PMI rose to 47.8 from a final reading of 46.7 in April, better than expectations for a reading of 47.0, but still well below the 50 level that separates growth from contraction.

The euro zone services PMI rose to 47.5 from 47.0 in April, above expectations for a reading of 47.2.

Germany's manufacturing PMI rose to a two month high 49.0 from 48.1 in April.

The U.S. was to publish data on new home sales later in the trading day.



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This article appears in: Investing , Forex and Currencies

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