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Forex - USD/CAD drops in early trade as U.S. data weighs

Published 02/12/2015, 09:28 AM
Greenback declines against loonie on downbeat U.S. reports
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Investing.com - The U.S. dollar dropped against its Canadian counterpart on Thursday, weighed by downbeat U.S. retail sales and jobless claims reports, although persistant concerns over Greece still lent some support to the safe-haven greenback.

USD/CAD hit 1.2527 during early U.S. trade, the pair's lowest since Tuesday; the pair subsequently consolidated at 1.2543, retreating 0.70%.

The pair was likely to find support at 1.2446, the low of February 10 and resistance at 1.2699, Wednesday's high.

In a report, the U.S. Commerce Department said that retail sales declined by 0.8% last month, worse than expectations for a drop of 0.5%. Retail sales fell by 0.9% in December.

Core retail sales, which exclude automobile sales, slumped 0.9% in December, disappointing forecasts for a 0.4% decline. Core sales in November dropped 0.9%, upwardly revised from a previously reported fall of 1.0%.

Separately, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 7 increased by 25,000 to 304,000 from the previous week’s revised total of 279,000.

Analysts had expected initial jobless claims to rise by 6,000 to 285,000 last week.

In Canada, data showed that new house prices rose 0.1% in December, disappointing expectations for a 0.2% gain, after a 0.1% uptick the previous month.

Meanwhile, investors remained cautious as talks between Greece and European Union officials ended without an agreement on Wednesday, though both sides said there was still hope for a deal. Further talks are due to be held next Monday.

Greece’s current bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.

The loonie was higher against the euro, with EUR/CAD shedding 0.55% to 1.4235.

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