Investing.com - The U.S. dollar edged higher against its Canadian counterpart on Thursday, bouncing off a more than one-week trough after the release of strong U.S. data, while lower oil prices and a disappointing economic report from Canada weighed on the local currency.
USD/CAD hit 1.2647 during early U.S. trade, the session high; the pair subsequently consolidated at 1.2636, adding 0.14%.
The pair was likely to find support at 1.2553, the low of August 4 and resistance at 1.2771, Wednesday’s high.
The greenback strengthened after the U.S. Department of Labor reported on Thursday that the number of people who filed for unemployment assistance in the U.S. last week fell more than expected.
A separate report showed that manufacturing activity in the Philadelphia region declined less than expected this month.
On a less positive note, the Federal Reserve said that industrial production increased by 0.2% from the previous month, below expectations for a 0.3% rise
The dollar had weakened after the minutes of the Fed’s July policy meeting released on Wednesday showed that members of the central bank remain divided over the need to raise interest rates further this year, citing low inflation.
Markets were also jittery after U.S. President Donald Trump disbanded two high-profile business advisory councils, sparking concerns over the administration’s ability to implement his economic reforms.
The move came after several chief executives quit in protest over his remarks blaming weekend violence in Virginia not only on white nationalists but also on anti-racism activists who opposed them.
In Canada, data showed that manufacturing sales dropped 1.8% in June, compared to expectations for a decline of 1.0%.
Manufacturing sales increased by 1.3% in May, whose figure was revised from a previously estimated 1.1% gain.
The commodity-related Canadian dollar was also affected by a drop in crude oil prices, which were hovering at a more than three-week trough amid concerns over rising U.S. production.
The loonie was higher against the euro, with EUR/CAD declining 0.34% to 1.4799.