Daily Afternoon Report 16.02.2017

The U.S. dollar trimmed losses against its Canadian counterpart on Thursday, easing off a one-and-a-half week low after the release of strong U.S. economic reports, although higher oil prices lent support to the commodity-related Canadian currency.

USD/CAD eased off 1.3010, the pair’s lowest since February 6, to hit 1.3045 during early U.S. trade, still down 0.27%.

The pair was likely to find support at 1.3004, the low of February 6 and resistance at 1.3121, Wednesday’s high.

The U.S. Department of Labor said initial jobless claims increased by 5,000 to 239,000 in the week ending February 11 from the previous week’s total of 234,000. Analysts expected jobless claims to rise by 11,000 to 245,000 last week.

In addition, the Philadelphia Federal Reserve said its business conditions index jumped to 43.3 this month from 23.6 in January, which was the highest level since November 2014. Economists had expected a reading of 18.0 this month.

Data also showed that building permits jumped by 4.6% to 1.285 million units last month from 1.210 million in December.

However, U.S. housing starts fell by 2.6% to 1.246 million units last month from December’s total of 1.279 million units.

The greenback had strengthened broadly after Federal Reserve Chair Janet Yellen told the U.S. Senate Banking Committee on Tuesday that the central bank will likely need to raise interest rates at one of its upcoming meetings.

Ms. Yellen said that waiting too long to raise interest rates would be “unwise,” given the rise in inflation and economic growth.

Meanwhile, the Canadian dollar was supported by a rise in oil prices on Thursday, as market players continued to weigh the prospect of production cuts by major crude-producing nations against a rise in U.S. supplies.

The loonie was lower against the euro, with EUR/CAD up 0.20% at 1.3892.