Forex - USD/CAD falls to 1-week low on ECB liquidity measures

Published 09/15/2011, 09:35 AM
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Investing.com – The U.S. dollar fell to a one-week low against its Canadian counterpart on Thursday, as the greenback came under pressure after the European Central Bank announced measures to boost dollar liquidity.

USD/CAD hit 0.9835 during U.S. morning trade, the lowest since September 8; the pair subsequently consolidated at 0.9854, slumping 0.38%.

The pair was likely to find short-term support at 0.9829, the low of September 8 and resistance at 0.9976, the high of September 13.

Risk sentiment was boosted after the ECB announced that it will introduce U.S. dollar liquidity-providing measures to European banks before the end of the year, in conjunction with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank.

Meanwhile, the greenback came under further pressure following the release of a flurry of lackluster U.S. data.

The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits rose by 11,000 to a seasonally adjusted 428,000 last week, confounding expectations for a decline to 410,000.

A separate report from the Federal Reserve Bank of New York said that manufacturing conditions in the New York-region fell by 1.1 points to minus 8.8 in September from minus 7.7 in August. Analysts had expected the index to improve to minus 4.0 in September.

Also Thursday, official data showed that U.S. core consumer price inflation rose 0.2% in August, in line with market expectations, while consumer prices including food and energy costs rose 0.4% last month, above expectations for a 0.2% gain.

In Canada, a government report showed that manufacturing sales jumped by 2.7% in July, blowing past expectations for a 1.4% increase. 

Elsewhere, the Canadian dollar was down against the euro, with EUR/CAD jumping 0.68% to hit 1.3701.

The single currency was boosted as fears over an imminent Greek default eased, while a successful Spanish debt auction further lifted sentiment.

Later in the day, the U.S. was to publish official data on manufacturing activity in Philadelphia.


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