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Forex - USD/CAD pares losses after U.S., Canadian data

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Investing.com -

Investing.com - The U.S. dollar pared losses against its Canadian counterpart on Thursday, as lower than expected Canadian building permits data weighed on demand for the loonie, although a downbeat U.S. jobless claims report fuelled fresh concerns over the U.S. job market.

USD/CAD pulled away from 1.0917, the pair's lowest since Wednesday, to hit 1.0934 during European afternoon trade, still down 0.07%.

The pair was likely to find support at 1.0885, the low of May 22 and resistance at 1.0989, the high of May 5.

Official data showed that building permits in Canada rose 1.1% in April, confounding expectations for an increase of 1.4%, after a 3.2% decline in March, whose figure was revised down from a previously estimated 3% drop.

Meanwhile, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 31 increased by 8,000 to 312,000 from the previous week's revised total of 304,000.

Analysts had expected jobless claims to rise by 6,000 to 310,000 last week.

Market participants now turned their attention to Friday's report on U.S. nonfarm payrolls for further indications on the strength of the U.S. job market after a data on Wednesday showed that private sector employment rose less than expected last month.

The loonie was higher against the euro, with EUR/CAD down 0.49% to 1.4804.

The single currency came under broad selling pressure after the ECB lowered its benchmark interest rate to a record-low 0.15% from 0.25%, compared to expectations for a cut to 0.1%.

The central bank also cut its marginal lending to 0.40% from 0.75% and lowered its deposit facility rate to -0.10% from 0.0%.

Speaking at the ECB's post-policy meeting press conference, central bank president Mario Draghi said the rate decision would contribute to bringing inflation rates closer to the centrak bank's target of just below 2% and that the bank is determined to safeguard this anchoring.

Draghi added that key ECB rates will remain at present levels for an extended period of time, but that the bank is prepared to act swiftly with further monetary easing measures, including asset-backed security purchases, in case of a prolonged period of low inflation.

To support bank lending, Mario Draghi said the ECB will be conducting a series of Targeted Longer Term Refinancing Operations (TLTROs), all of which will mature in September 2018. Two successive TLTROs are scheduled to be launched in September and December 2014, he added.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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