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Forex - USD/CAD trims losses after soft U.S. data

Published 05/31/2012, 09:35 AM
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EUR/CAD
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Investing.com - The U.S. dollar pared back losses against its Canadian counterpart on Thursday, following the release of a raft of weak U.S. data, while ongoing concerns over the situation in the euro zone also supported safe haven demand.

USD/CAD pulled back from 1.0260, the session low, to hit 1.0290 during early U.S. trade, down 0.09% on the day.

The pair was likely to find support at 1.0216, Wednesday’s low and short-term resistance at 1.0311, the session high and a near five-month high.

In the U.S., official data showed that first quarter gross domestic product was revised to 1.9%, in line with expectations, from an initial estimate of 2.2%.

Meanwhile, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 383,000, defying expectations for a decline of 3,000 to 370,000.

A separate report showed that the U.S. private sector added 133,000 jobs in May, missing expectations for an increase of 148,000.

Market sentiment remained supported by expectations that Ireland would pass a vote for the European Union’s fiscal treaty in a referendum on Thursday.

But ongoing worries over the situation in Spain, where mounting borrowing costs and the lack of a convincing plan to recapitalize stricken lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.

The Canadian dollar was unchanged after official data showed that Canada’s current account deficit increased slightly less-than-expected in the first quarter, expanding to CAD10.3 billion, below expectations for shortfall of CAD10.85 billion.

The loonie, as the Canadian dollar is sometimes known, was slightly lower against the euro, with EUR/CAD easing up 0.14% to hit 1.2756.

Later in the day, the U.S. was to release data on business activity in the Chicago area.


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