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Forex - USD/CAD trims losses amid euro zone optimism

Published 01/12/2012, 09:42 AM
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Investing.com - The U.S. dollar trimmed losses against its Canadian counterpart on Thursday, as positive comments by European Central Bank President Mario Draghi overshadowed downbeat U.S. data.

USD/CAD hit 1.0140 during early U.S. trade, the daily low; the pair subsequently consolidated at 1.0175, shedding 0.19%.

The pair was likely to find support at 1.0125, the low of December 28 and resistance at 1.0209, the high of January 2.

Speaking at the central bank’s post-policy meeting press conference, Draghi said the ECB saw "tentative signs of stabilization of activity at low levels" although the economy still faced "substantial downside risks."

Draghi also said the central bank’s recent refinancing operation has made a substantial contribution to improving the funding situation for banks in the euro zone and averting a liquidity crunch.

In the U.S., the Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending January 7 rose to 399,000 from 375,000 the previous week.

Analysts had expected U.S. jobless claims to remain unchanged last week at 375,000.

A separate report showed that U.S. retail sales rose less-than-expected in December, ticking up 0.1%, while core retail sales declined unexpectedly.

Meanwhile, the loonie also found support as crude oil for delivery in February climbed 0.87% to trade at USD101.75 a barrel on the New York Mercantile Exchange.

Raw materials, including oil account for about half of Canada’s export revenue.

Elsewhere, the Canadian dollar was lower against the euro with EUR/CAD rising 0.42%, to hit 1.3009.

Sentiment was boosted earlier after auctions of Spanish and Italian government debt met with solid investor demand and lower yields.


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