The loonie, as the Canadian dollar is best known, declined against the US dollar, following a report that showed the Canadian housing price index rose less than analysts projected. However, losses were limited after US jobless claims unexpectedly increased last week, while at the same time retail sales declined.
USD/CAD hit a session high at 1.1026 at 13:48 GMT, after which the pair consolidated at 1.1013, adding 0.1% for the day. Support was likely to be received at February 12th low, 1.0976, while resistance was to be encountered at February 11th high, 1.1091.
Greenbacks demand was pressured after two downbeat reports raised concerns over the uneven economic recovery of the US.
The US Department of Labor reported today that the number of people who filed for unemployment benefits for the first time increased to 339 000 in the week ended February 8, while analysts projected the number of initial jobless claims will decline to 330 000 from 331 000 in the previous week.
A separate report by the US Census Bureau, revealed the nations retail sales dropped by 0.4% in January, after a downward revised 0.1% decrease in the previous month. Analysts had expected the retail sales index to remain flat in January. Retail sales are closely watched, because they provide crucial information regarding the tendency in consumer spending in the United States, which, on the other hand, accounts for about 70% of nation’s Gross Domestic Product.
Meanwhile, loonies demand was pressured after Statistics Canada reported today that the new housing price index inched up by mere 0.1% in December, short of analysts projections of a 0.2% increase and after the index remained flat in November.
Earlier this week, the Canadian Finance Minister presented a budget that revealed a return to surplus next year, easing speculation Bank of Canada would have to take decisive steps to support the nations economy.
“There will continue to be a bid on Canada, with a budget like that,” Stefane Marion, the chief economist at National Bank of Canada, said yesterday in a Bloomberg interview. “The market was way too aggressive pricing in a rate cut in Canada just a few weeks ago.”
The Canadian currency remained supported after the price of crude oil, which is the nations top export, rose to a 4-month high yesterday.
Elsewhere, EUR/USD touched a two-week high at 1.3686 at 09:50 GMT, after which consolidation followed at 1.3665, surging 0.53% for the day. Support was likely to be received at February 12th low, 1.3562, while resistance was to be met at January 28th high, 1.3688.
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