US dollar traded lower against its Canadian counterpart on Monday, after the release of Septembers report on factory orders out of the United States, while at the same time, Canadian currency was underpinned alongside other commodity currencies such as the Aussie.
USD/CAD touched a session low at 1.0398 at 12:15 GMT, after which consolidation followed at 1.0414, losing 0.09% for the day. Support was likely to be received at October 24th low, 1.0365, while resistance was to be met at November 1st high, 1.0452.
The Department of Commerce said earlier on Monday that new orders of non-military capital goods other than aircraft in the United States, an indicator of business spending plans, declined 1.3% during September. Shipments for the core capital goods category, which exclude aircraft and military goods, decreased 0.2% in September. The data suggests that business entities may have probably considered to invest less, because the fiscal deadlock in Washington threatened to lead the US government to miss payments on its obligations.
Overall factory orders, however, climbed 1.7% in September to reach 490.8 billion USD, after the indicator dipped 0.1% in August. Experts had expected that orders will rise 1.8% in September and 0.3% in August.
Meanwhile, Canadian dollar gained ground for a third consecutive day against the US rival, following the rally in the Australian currency, which indicated improved prospects for commodity-exporting countries.
“The big rally in the Aussie dollar seems to have pulled the other commodity currencies along with it,” Adam Cole, head of Group of 10 currency strategy at Royal Bank of Canada said by phone from London, cited by Bloomberg. “Till we get to Friday, the domestic risk is limited.”
Private sector in Canada probably added 11 000 jobs in October, according to the median estimate of 22 economists surveyed by Bloomberg, compared with 11 900 jobs in September. At the same time, the unemployment rate increased to 7.0% in October from 6.9% a month ago. The official figures are expected to be released on Friday.
On Thursday last week Canadian dollar received a boost against major peers, after it became clear that nation’s Gross Domestic Product grew 0.3% in August on a monthly basis, exceeding the expected 0.1% gain.
Elsewhere, the loonie was steady against the euro, with EUR/CAD cross gaining 0.06% on a daily basis to trade at 1.4068 at 14:40 GMT. GBP/CAD pair was up 0.11% to trade at 1.6621 at 14:42 GMT.
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