Forex - USD/CAD reverses losses after U.S. retail, PPI data

Published 12/14/2010, 09:14 AM
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Investing.com – The U.S. dollar reversed losses against its Canadian counterpart on Tuesday, rebounding from the daily low after the release of better-than-expected U.S. data on retail sales and producer price inflation.

USD/CAD clawed up from 1.0049, the daily low to hit 1.0096 during European afternoon trade, gaining 0.25%.

The pair was likely to find support at 1.0026, Monday’s low and short-term resistance at 1.0140, the high of December 8.

Earlier in the day, the U.S. Census Bureau said that retail sales rose 0.8% in November, after rising by a revised 1.7% the previous month. Analysts had expected retail sales to increase by 0.5% in November.

Core retail sales, which exclude automobile sales, rose significantly more-than-expected, increasing by 1.2%, after rising by a revised 0.8% in October.

A separate report showed that PPI rose by a seasonally adjusted 0.8% in November, after rising by 0.4% the previous month. Analysts had expected PPI to increase by 0.5% in November.

Core PPI, which excludes food and energy costs, rose 0.3% after falling by 0.6% in October.

Later in the day, the Federal Reserve was to announce its federal funds rate and release its December rate statement.

The loonie was also down against the euro, with EUR/CAD climbing 0.37% to hit 1.3538.

Also Tuesday, official data showed that an index of leading Canadian economic indicators rose less-than-expected in November, while a separate report showed that labor productivity rose less-than-expected in the third quarter.

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