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Forex - USD/CAD drops to 2-month lows in early trade

Published 02/25/2016, 09:28 AM
Greenback drops against loonie despite declining oil prices
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Investing.com - The U.S. dollar dropped to two-month lows against its Canadian counterpart on Thursday, after the release of mixed U.S. data and despite a fresh decline in oil prices.

USD/CAD hit 1.3606 during early U.S. trade, the pair’s lowest since December 10; the pair subsequently consolidated at 1.3622, retreating 0.53%.

The pair was likely to find support at 1.3528, the low of December 10 and resistance at 1.3861, Wednesday’s high.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending February 20 increased by 10,000 to 272,000 from the previous week’s total of 262,000.

Analysts expected jobless claims to rise by 8,000 to 270,000 last week.

Separately, the U.S. Commerce Department said that total durable goods orders rose by 4.9% last month, blowing past forecasts for a rise of 2.5%.

Core durable goods orders, which exclude volatile transportation items, increased by 1.8% in January, easily surpassing expectations for a gain of 0.2%.

Meanwhile, the commodity-related Canadian dollar seemed to shrug off a new decline in oil prices.

Crude oil futures for April delivery moved back toward $31 a barrel on Thursday after rising above the $33 level earlier in the week, as weekly stockpile data released on Wednesday showed that U.S. oil inventories rose to an all-time high last week, fuelling fresh concerns over a global supply glut.

The loonie was higher against the euro, with EUR/CAD declining 0.63% to 1.4990.

In the euro zone, data on Thursday showed that consumer price inflation rose by an annual rate of 0.3% last month, down from a preliminary estimate of 0.4%. Month-over-month, consumer prices fell 1.4% last month, matching forecasts.

Core CPI, which excludes food, energy, alcohol, and tobacco costs rose by 1.0% in January, meeting expectations and unchanged from an initial estimate.

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