Investing.com - The U.S. dollar moved higher against its Canadian counterpart on Thursday, easing off a 14-month trough as the recent rally in oil prices paused, but weak U.S. data and the Federal Reserve’s latest comments on inflation were expected to limit the greenback’s gains.
USD/CAD hit 1.2495 during early U.S. trade, the session high; the pair subsequently consolidated at 1.2485, gaining 0.31%.
The pair was likely to find support at 1.2412, Wednesday’s low and a 14-month trough and resistance at 1.2544, Wednesday’s high.
The commodity-related Canadian dollar lost some ground due to a drop in oil prices on Thursday, after the commodity hit eight-week highs overnight following news of a fourth consecutive week of declines in U.S. crude inventories.
In the U.S., the Department of Labor said initial jobless claims in the week ending July 22 rose by 10,000 to 244,000 from the previous week’s revised total of 234,000. Analysts expected jobless claims to rise by 7,000 to 241,000 last week.
Separately, the Commerce Department said durable goods orders jumped by 6.5% last month, blowing past forecasts for a rise of 3.0%.
However, core durable goods orders, which exclude volatile transportation items, increased by 0.2% in June, missing expectations for a gain of 0.4%.
The dollar weakened broadly after the Fed said on Wednesday that inflation remains below its 2% target even as near-term risks to the economic outlook appear “roughly balanced.” In the past, the Fed judged that weakness in inflation was transitory.
The central bank’s cautious tone on inflation sparked fresh uncertainty over the possibility of a third rate hike this year.
The Fed also said it expected to start shrinking its balance sheet "relatively soon", prompting expectations for an announcement in September.
The loonie was steady against the euro, with EUR/CAD at 1.4603.