USD/CAD on session lows as US PPI disappoints

US dollar fell to its lowest point against its Canadian peer on trading Wednesday, following the release of a report to show that US producer prices remained flat in July, which raised fears that economic recovery might be not strong enough.

USD/CAD slid to a session low at 1.0323 at 13:12 GMT, after which consolidation followed at 1.0330. Support was likely to be found at August 13th low, 1.0300, while resistance was to be encountered at current session high, 1.0370.

Earlier on Wednesday an official report said that producer prices in the United States remained unchanged in July, giving implications that inflation rate remained still low. The index, gauging producer prices, was flat in July on a monthly basis, after the 0.8% increase in June. Experts had anticipated a 0.3% rise in prices. US companies had larger expenses over pharmaceutical products and communication equipment, while prices of gasoline and natural gas recorded a drop. The core producer price index (PPI), which does not include volatile components such as food and energy costs, ticked up 0.1% in July monthly, after the 0.2% rise in June. Forecasts pointed a 0.2% increase. Core producer price inflation was suppressed during the past year, although increased prices of energy products forced up wholesale price inflation. Prices in wholesale trade usually follow the trend of consumer prices, as both are closely watched by the Federal Reserve bank. The index of consumer prices in the United States is to be released tomorrow. US PPI advanced 2.1% in July on annual basis, below the expected 2.4% increase, after rising 2.5% in June.

Meanwhile, the loonie, as Canadian dollar is also known, was trading higher against the euro, as EUR/CAD cross erased 0.18% to 1.3696 at 14:30 GMT. GBP/CAD, on the other hand, was on positive territory, up by 0.41% to trade at 1.6048 at 14:34 GMT.

Elsewhere, the Aussie and the kiwi gained certain ground against the greenback, as AUD/USD soared 0.40% to trade at 0.9151 at 14:40 GMT, while NZD/USD jumped 0.84% to reach 0.8034 at 14:43 GMT.