The loonie, as the Canadian dollar is best known, declined against its US counterpart, after a series of upbeat US reports continued to weigh on greenback’s demand.
Having reached a session high at 1.0975 at 13:15 GMT, USD/CAD rose by 0.21% to trade at 1.0954 at 14:43 GMT. Support was likely to be received at January 15th low, 1.0915, while resistance was to be encountered at January 15th high 1.0962.
The greenbacks demand was slightly pressured, following some downbeat reports released today, but continued to draw support after a series of strong US economic data was released on Thursday.
Today, a report by the US Census Bureau revealed that the number of US building permits fell to 0.986 million in December after 1.017 million units in the previous month. Analysts projected the number of building permits will decline to 1.015 million units.
Data also showed that the number of housing starts declined to 0.999 million in December, following a revised downwards 1.107 million units in the preceding month. Analysts had expected that the number of housing starts will slid to 0.990 million units.
A separate report showed the industrial production rose 0.3% in December, matching analysts forecasts and after a revised downwards 1% gain in the previous month.
Data also showed the capacity utilization rate increased to 79.2% in December, from 79.1% in the preceding month. Analysts had predicted that the rate will remain unchanged at 79.1%.
However, the US dollar continued to draw support, following a number of US upbeat reports released yesterday.
Yesterday, the Federal Reserve Bank of Philadelphia reported its manufacturing activity index improved to a reading of 9.4 in January, surpassing preliminary estimates of a reading of 8.8, while in December the index came in at 6.4. The reading reflects the difference between optimistic and pessimistic forecasts, measured as a percentage, regarding business conditions in manufacturing in the region.
A separate report by the US Department of Labor, 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.
In addition, the nation’s PPI surged by an annualized 1.2% in December, after the index increased by 0.7% in November. Analysts had expected the PPI will rise to 1.1%. Month-over-month, the PPI increased by 0.4% in December, the largest increase since June and in line with analysts’ forecasts and after the index declined by 0.1% in the preceding month.
Data showed that the core PPI also rose by an annualized 1.4%, exceeding previous month 1.3% increase and higher than analysts’ estimates of a 1.3% gain. Month-over-month, the index rose by 0.3% in December, while analysts had expected the index will rise by 0.1%. In November the core PPI rose by 0.1%.
Meanwhile, yesterday, the Canadian Prime Minister Stephen Harper said in an interview that he approves the BoCs decision to stop warning about higher interest rates and forecast a robust economic growth in 2014.
The depreciation “really isn’t a drop in the value of the Canadian dollar, what there is, as you know, is a rise globally in the value of the American dollar, ” Harper said, cited by Bloomberg.
Yesterday, the loonie gained some support 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.
Last week, 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 low at 1.3593 at 09:45 GMT, EUR/USD traded at 1.3598 at 12:18 GMT, losing 0.16% for the day. The pair has headed for a weekly decline of 0.52% so far. Support was likely to be received at January 16th low, 1.3583, while resistance was to met at January 16th high, 1.3650.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
