Forex – USD/CAD rises on U.S. data, tumbling oil prices

The U.S. dollar rose against its Canadian counterpart on Thursday, helped by the release of upbeat U.S. jobless claims data and as declining oil prices dampened demand for the commodity-related Canadian currency.

USD/CAD hit 1.3448 during early U.S. trade, the session high; the pair subsequently consolidated at 1.3420, adding 0.10%.

The pair was likely to find support at 1.3309, the low of April 24 and resistance at 1.3541, Wednesday’s high.

The U.S. Department of Labor said initial jobless claims in the week ending May 20 increased by 1,000 to 234,000 from the previous week’s total of 233,000. Analysts expected jobless claims to rise to 238,000 last week.

The data came a day after the minutes of the Federal Reserve’s May meeting showed that the central bank plans to unwind its balance sheet towards the end of the year, possibly using a system where cap limits are implemented on how much the Fed would roll off every month without reinvesting.

The Fed also signaled that interest rates could be raised soon, but added that “it would be prudent” to wait for more U.S. economic data.

Meanwhile, the Canadian dollar weakened as oil prices moved sharply lower after OPEC decided to extend production cuts by nine months to March 2018.

The loonie was steady against the euro, with EUR/CAD at 1.5041.

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