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Forex - USD/CAD lower as market sentiment improves

Published 11/17/2011, 09:26 AM
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Investing.com - The U.S. dollar fell to a fresh daily low against its Canadian counterpart on Thursday, after positive U.S. data on employment and housing but investors remained cautious amid ongoing worries over the euro zone’s debt crisis.

USD/CAD 1.0209 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.0234, shedding 0.12%.

The pair was likely to find support at 1.0092, the low of November 11 and resistance at 1.0327, the high of October 12.

Government data showed that U.S. building permits rose more-than-expected in October, climbing to the highest level since March 2010. The number of building permits issued rose 9.2% to a seasonally adjusted 0.65 million from 0.59 million in September.

Analysts had expected building permits to rise 1.6% to 0.60 million units in October.

The report also showed that U.S. housing starts were largely unchanged in October, holding steady at 0.63 million, compared to expectations for a decline to 0.61 million. 

A separate report revealed that the number of people who filed for unemployment assistance in the U.S. in the week ending November 11 fell by 5,000 to a seven-month low of 388,000.

But investors remained jittery after Spanish 10-year bond yields surged to a euro-era high of 6.97% earlier, close to the 7% threshold widely seen as unsustainable in the long term.

Meanwhile, French 10-year bond yields also climbed to their highest level since the inception of the single currency, adding to fears over sovereign debt contagion to core euro zone economies.

Elsewhere, the loonie was down against the euro with EUR/CAD advancing 0.23%, to hit 1.3825.

Earlier Thursday, official data showed that Canada’s foreign security purchases declined unexpectedly in September, falling to CAD7.35B from a reading at CAD8.22B the previous month.

Analysts had expected foreign security purchases to rise to CAD9.24B.

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