The U.S. dollar pared gains against its Canadian counterpart on Friday, pulling away from a two-month peak although expectations for a U.S. rate hike next month continued to support demand for the greenback.
USD/CAD pulled back from 1.3422, the pair’s highest since January 4, to hit 1.3399 during U.S. morning trade, steady for the day.
The pair was likely to find support at 1.3320, Thursday’s low and resistance at 1.3458, the high of January 4.
The greenback remained broadly supported after a number of Federal Reserve officials this week expressed their support for a March rate hike.
The dollar was also boosted after the U.S. Department of Labor said on Thursday that initial jobless claims declined by 19,000 to 223,000 in the week ending February 25 from the previous week’s total of 242,000.
Analysts expected jobless claims to rise by 1,000 to 243,000 last week.
Meanwhile, sentiment on the commodity-related Canadian dollar was fragile as oil prices were under pressure this week amid mounting concerns over U.S. stockpile and production levels.
The loonie was lower against the euro, with EUR/CAD advancing 0.64% to 1.4158.