US dollar traded on higher levels against its Canadian counterpart on Friday, but greenbacks demand still felt the weight of comments made by FED Chairman Ben Bernanke on Wednesday, thus advance pace was limited.
USD/CAD hit a session high at 1.0402 at 14:11 GMT, after which consolidation followed at 1.0383. The cross was expected to find support at June 20th low, 1.0272, while resistance was to be encountered at June 21st high, 1.0488.
US dollar sharply lost positions against its major peers after on Wednesday Federal Reserve Bank Chairman Ben Bernanke said, that central bank’s policy should remain accommodative, even after the minutes of FED’s June meeting revealed that there were debates, regarding a possible exit to the stimulus program. According to FED minutes, half of the 19 members of FOMC voted in favor of terminating monthly asset purchases by the end of this year. However, some policymakers were not convenient with this idea, because, in their view, US labor market was in need of further improvement.
Earlier on Friday it was reported that producer price inflation in the United States accelerated in June, rising by 0.8%, above the expected 0.5% increase. Core producer price inflation increased by 0.2% in June, slightly above estimates of a 0.1% climb, and following the 0.1% rise, recorded during May.
Additionally, a report by University of Michigan showed that preliminary value of its consumer confidence index surprisingly dropped to 83.9 in July from Junes final reading of 84.1. Experts had projected Julys initial value of the index to have increased to 84.7, a level close to highest point in six years, because of the increasing domestic share prices, home prices and the slowly regenerating US labor market.
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