Investing.com – The U.S. dollar rallied to an 11-month high against its Canadian counterpart on Thursday, climbing above parity as mounting fears over the global economic outlook dampened the appeal of growth-linked currencies.
USD/CAD hit 1.0360 during U.S. morning trade, the highest since October 19, 2010; the pair subsequently consolidated at 1.0302, surging 2.2%.
The pair was likely to find support at 0.9908, Wednesday’s low and short-term resistance at 1.0373, the high of October 19.
Concerns over the U.S. economic outlook intensified after the Federal Reserve warned of “significant downside risks” facing the U.S. economy on Wednesday and announced fresh measures to boost growth.
The Fed unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
Adding to global worries, a preliminary reading of the HSBC China purchasing managers' index fell to a two-month low of 49.4 in September, remaining in contraction territory for the third consecutive month.
The loonie came under further pressure after crude oil for delivery in November plunged 5.8% to trade at a five-month low USD80.92 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 9,000 to 423,000, falling short of expectations for a decline to 420,000.
Meanwhile, Statistics Canada said earlier that core retail sales, which exclude automobile sales, were flat in July, confounding expectations for a 0.2% gain, while retail sales, including the more volatile items, fell by 0.6% in July, worse than the expected 0.3% decline.
Elsewhere, the Canadian dollar was also lower against the euro, with EUR/CAD jumping 1.27% to hit 1.3857.
Earlier in the day, data showed that German manufacturing output fell to a 24-month low in September, while manufacturing activity in the euro zone slumped to the lowest since August 2009.
USD/CAD hit 1.0360 during U.S. morning trade, the highest since October 19, 2010; the pair subsequently consolidated at 1.0302, surging 2.2%.
The pair was likely to find support at 0.9908, Wednesday’s low and short-term resistance at 1.0373, the high of October 19.
Concerns over the U.S. economic outlook intensified after the Federal Reserve warned of “significant downside risks” facing the U.S. economy on Wednesday and announced fresh measures to boost growth.
The Fed unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
Adding to global worries, a preliminary reading of the HSBC China purchasing managers' index fell to a two-month low of 49.4 in September, remaining in contraction territory for the third consecutive month.
The loonie came under further pressure after crude oil for delivery in November plunged 5.8% to trade at a five-month low USD80.92 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 9,000 to 423,000, falling short of expectations for a decline to 420,000.
Meanwhile, Statistics Canada said earlier that core retail sales, which exclude automobile sales, were flat in July, confounding expectations for a 0.2% gain, while retail sales, including the more volatile items, fell by 0.6% in July, worse than the expected 0.3% decline.
Elsewhere, the Canadian dollar was also lower against the euro, with EUR/CAD jumping 1.27% to hit 1.3857.
Earlier in the day, data showed that German manufacturing output fell to a 24-month low in September, while manufacturing activity in the euro zone slumped to the lowest since August 2009.