Thursday, May 19, 2016

Forex - USD/CAD rises to 6-week highs in early trade

© Reuters. Greenback moves higher against loonie on U.S. rate hike hopes© Reuters. Greenback moves higher against loonie on U.S. rate hike hopes

Investing.com - The U.S. dollar rose to six-week highs against its Canadian counterpart on Thursday, as expectations for a June rate hike in the U.S. boosted the greenback despite weak U.S. data, while declining oil prices and downbeat Canadian data weighed on the local currency.

hit 1.3155 during early U.S. trade, the pair's highest since April 8; the pair subsequently consolidated at 1.3133, advancing 0.76%.

The pair was likely to find support at 1.2893, Wednesday's low and resistance at 1.3219, the high of April 5.

The U.S. Department of Labor said in the week ending May 14 decreased by 16,000 to 278,000 from the previous week's total of 294,000. Analysts expected jobless claims to fall by 19,000 to 275,000 last week.

Separately, the Federal Reserve Bank of Philadelphia said that its deteriorated to -1.8 this month from April's reading of -1.6. Analysts had expected the index to improve to 3.5 in May.

But the dollar remained supported after the Fed's showed that officials said a June rate hike would be appropriate if economic data indicated that growth was picking up in the second quarter and employment and inflation were firming.

Meanwhile, Statistics Canada said that declined by 1.0% in March, compared to expectations for a 0.5% fall. Wholesale sales dropped 2.3% in February, whose figure was revised from a previously estimated 2.2% slide.

The commodity-related Canadian dollar was also hit as moved sharply lower after data on Wednesday showed that U.S. stockpiles rose unexpectedly last week.

The loonie was lower against the euro, with climbing 0.63% to 1.4712.

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