Investing.com - The U.S. dollar rose to six-week highs against the Canadian dollar on Thursday after July’s Federal Reserve minutes indicated that the bank is on track to start tapering this year, and after the release of weak Canadian retail sales data.
USD/CAD hit 1.0516 during early U.S. trade, the highest since July 10; the pair subsequently consolidated at 1.0514, gaining 0.42%.
The pair was likely to find support at 1.0468, the session low and resistance at 1.0573, the high of July 9.
The dollar strengthened across the board after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.
However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate.
The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.
Meanwhile, data on Thursday showed that U.S. initial jobless claims rose more-than-expected last week, but remained close to six-year lows.
The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 13,000 to a seasonally adjusted 336,000, slightly higher than forecasts for 330,000.
The Canadian dollar extended losses after data showed that retail sales in Canada fell in June.
Statistics Canada said retail sales declined by a seasonally adjusted 0.6% compared to estimates for a 1% decline, after rising by 1.8% in May.
Core retail sales, which exclude automobile sales, fell by a seasonally adjusted 0.8% in June, confounding expectations for a 0.1% increase.
Elsewhere, the loonie, as the Canadian dollar is also known, fell to 22-month lows against the euro, with EUR/CAD rising 0.29% to 1.4025.
The euro was boosted after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.
The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.
The flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.
USD/CAD hit 1.0516 during early U.S. trade, the highest since July 10; the pair subsequently consolidated at 1.0514, gaining 0.42%.
The pair was likely to find support at 1.0468, the session low and resistance at 1.0573, the high of July 9.
The dollar strengthened across the board after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.
However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate.
The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.
Meanwhile, data on Thursday showed that U.S. initial jobless claims rose more-than-expected last week, but remained close to six-year lows.
The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose by 13,000 to a seasonally adjusted 336,000, slightly higher than forecasts for 330,000.
The Canadian dollar extended losses after data showed that retail sales in Canada fell in June.
Statistics Canada said retail sales declined by a seasonally adjusted 0.6% compared to estimates for a 1% decline, after rising by 1.8% in May.
Core retail sales, which exclude automobile sales, fell by a seasonally adjusted 0.8% in June, confounding expectations for a 0.1% increase.
Elsewhere, the loonie, as the Canadian dollar is also known, fell to 22-month lows against the euro, with EUR/CAD rising 0.29% to 1.4025.
The euro was boosted after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.
The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.
The flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.