The US dollar advanced to levels close to its highest point in one week against the Canadian counterpart on Thursday, following the release of mixed reports out of the United States.
USD/CAD rose to a session high at 1.0324 at 14:18 GMT, the pairs highest point since September 17th. Support was to be received at current session low, 1.0303, while resistance was to be encountered at September 17th high, 1.0335.
Earlier on trading Thursday a report showed that US final Gross Domestic Product, a major indicator for overall economic activity in the country, rose by an annualized 2.5% in Q2, confirming the revised rate of growth, published last month. Analysts had projected that economy will expand by 2.6%.
At the same time, the number of initial jobless claims, an indicator for lay-offs in the United States, dropped by 5 000 to 305 000 last week, while previous week’s results experienced a slight revision upwards to 310 000 from 309 000 previously. Experts had anticipated that claims will reach 325 000.
“The claims number is a very good number — if anything, this should bring some U.S. dollar strength,” Greg Anderson, head global foreign-exchange strategy at Bank of Montreal, said by phone from New York, cited by Bloomberg. “If oil prices stay here and if we get a big payrolls number for the U.S., we could bounce back to C$1.04, C$1.05 pretty quickly. I anticipate a resurgence of the U.S. dollar against all currencies.”
On the other hand, pending home sales in the United States fell at an unexpectedly sharp rate for the third consecutive month in August, as this may be another proof that rising mortgage rates were restraining recovery in the US housing sector. According to data by the National Association of Realtors (NAR), the index, gauging pending home sales in the country, decreased by 1.6% in August compared to July to reach a value of 107.7. Preliminary estimates pointed that the index will retreat 1%. Home sales climbed in the beginning of the year, as buyers in the country showed willingness to finalize their deals as long as mortgage rates were exceptionally low.
Meanwhile, the discount Canada’s benchmark crude oil-grade, Western Canada Select, compared to West Texas Intermediate (WTI), its US counterpart, reached 31 USD per barrel, the highest level since February 4th, as imparted by Bloomberg.
Elsewhere, the loonie, as the Canadian currency is also known, was gaining against the euro, as EUR/CAD cross dropped 0.16% on a daily basis to trade at 1.3934 at 14:48 GMT. GBP/CAD pair was falling 0.33% to trade at 1.6536 at 14:51 GMT. All in all, Canadian dollar has appreciated 2% during this quarter, paring its annual decline to 3.8%.
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