USD/CAD retreats from the strongest level since September 2009, following mixed US data

The loonie, as the Canadian dollar is best known, rebounded against the US dollar from the weakest level in more than 4 years, following mixed US data.

USD/CAD reached a session low at 1.0905 at 14:38 GMT, after which consolidation followed at 1.0907, losing 0.25% for the day. Support was likely to be received at January 14th low, 1.0879, while resistance was to be met at January 15th high, 1.0992, also the pairs strongest since September 28th 2009.

The greenbacks demand was pressured, after data by the US Labor Department revealed the number of continuing jobless claims increased to 3.03 million in the week ended January 4th, the highest level since early July.

A separate report by the US Department of Treasury showed capital outflows from the economy totaled $16.6 billion in November, after an inflow of $188.1 billion in the previous month.

However, data by the US Department of Labor, released today showed the number of initial jobless claims fell to 326 000 in the week ended January 11th, the weakest level since November. Analysts had expected the people who file for unemployment benefits will be 328 000, after they have been revised downwards to 328 000 from 330 000 in the previous week.

A separate report by the US Bureau of Labor Statistics, revealed nations CPI rose by 0.3% in December, in line with analysts forecasts and after the index remained flat in the preceding month. On year-over-basis, the CPI soared by 1.5% in December, the most since September. The index increased in line with analysts projections and was higher than Novembers 1.3% increase.

Meanwhile, the loonies demand was supported after a report by Statistics Canada showed the foreign securities purchases or the amount of domestic stocks, bonds, and money-market assets purchased by foreign investors, more than doubled to 8.66 billion Canadian dollars in November, after a 4.41 billion Canadian dollars increase in the previous month. Analysts had projected the foreign securities purchases will surge to 7.21 billion Canadian dollars.

The Canadian dollar was under selling pressure after a series of downbeat reports increased bets Bank of Canada may signal interest-rate cut at the upcoming central bank’s policy meeting on January 22nd.

On Friday, the number of employed people in the country declined by 45 900 in December, the most since November 2011, after an increase of 21 600 in November. Analysts had expected that the Canadian employers will add 14 100 workers in December.

According to the report, the reduction in the number of employed people was mainly due to the enormous decline of full-time workers, whose number decreased by 60 000 in the last month, while part-time workers increased by 14 200. Adding to bearish sentiment, Canadian unemployment rate also increased to 7.2% in December from 6.9% in the preceding month.

Elsewhere, having reached a session high at 1.3628 at 09:30 GMT, EUR/USD traded little changed at 1.3604 at 12:39 GMT. Support was likely to be received at January 15th low, 1.3581, while resistance was to be encountered at January 15th high, 1.3674.