Investing.com - The U.S. dollar edged up near more than five-year highs agains its Canadian counterpart on Thursday, even after data showed that U.S. jobless claims fell less-than-expected last week as sustained expectations for a U.S. rate hike continued to broadly support the greenback.
USD/CAD hit 1.1839 during early U.S. trade, the session high; the pair subsequently consolidated at 1.1830, easing up 0.10%.
The pair was likely to find support at 1.1728, the low of January 6 and resistance at 1.1876, Wednesday's high and a more than five-year high.
In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 2 decreased by 4,000 to 294,000 from the previous week’s total of 298,000.
Analysts had expected initial jobless claims to decline by 8,000 to 290,000 last week.
Despite the higher than expected reading, the number of Americans applying for new jobless benefits has held below the 300,000-level for 16 out of the past 17 weeks, indicating the labor market recovery is gaining momentum.
But the dollar continued to be underpinned after a report on Wednesday showed that the U.S. private sector added a larger-then-forecast 241,000 jobs in December.
The upbeat data boosted the outlook for the U.S. recovery and raised expectations for a strong reading of the government nonfarm payrolls due on Friday.
On Wednesday, the minutes of the Federal Reserve’s December meeting did little to alter expectations that U.S. interest rates will start to rise later this year.
The loonie was higher against the euro, with EUR/CAD shedding 0.35% to 1.3941.
Sentiment on the single currency remained under pressure after data on Wednesday showed that the annual rate of euro zone inflation fell by 0.2% in December, down from 0.3% in November. It was the first fall in the annual rate of inflation since October 2009.
The decline in consumer prices added to expectations that the European Central Bank could implement quantitative easing as soon as its next meeting on January 22.