Daily Afternoon Report 16.03.2016

The U.S. dollar trimmed gains against its Canadian counterpart on Wednesday, after the release of mixed U.S. data and upbeat Canadian data, while investors awaited the Federal Reserve’s upcoming policy statement.

USD/CAD pulled away from 1.3405, the pair’s highest since March 9, to hit 1.3367 during early U.S. trade, still up 0.09%.

The pair was likely to find support at 1.3253, Tuesday’s low, and resistance at 1.3346, the high of March 9.

The U.S. Commerce Department said that housing starts rose 5.2% in February to hit 1.178 million units from January’s total of 1.120 million units. Analysts had expected a rise of 4.6% to 1.150 million.

Meanwhile, the number of building permits issued declined 3.1% to 1.202 million units last month from January’s 1.204 million. Economists had forecast a drop of 0.1% to 1.167 million units in February.

A separate report showed that the U.S. consumer price index fell by 0.2% in February, matching expectations. Year-over-year, consumer prices were 1.0% higher.

Core CPI, which excludes food and energy, increased at an annualized rate of 2.3% last month, compared to expectations for a 2.2% gain.

Data also showed that U.S. industrial production decreased by 0.5% last month, worse than expectations for a decline of 0.2%.

Investors were eyeing the conclusion of the Fed’s two-day policy meeting later Wednesday, with most investors expecting no change given recent signs of weakness in the global economy.

Elsewhere, Statistics Canada reported that manufacturing sales increased by 2.3% in January, beating expectations for a 0.5% gain. Manufacturing sales rose 1.4% in December, whose figure was revised from a previously estimated 1.2% increase.

Another report showed that Canada’s foreign securities purchases rose by C$1.36 billion in January after an increase of C$1.40 billion in December, whose figure was revised from a previously estimated C$1.41 billion drop.

The commodity-related Canadian dollar also found some support as oil prices moved higher on Wednesday after OPEC and non-OPEC producers agreed to hold their next meeting on a plan to freeze output levels in Doha, Qatar on April 17, even without the attendance of Iran.

The loonie was higher against the euro, with EUR/CAD slipping 0.22% to 1.4802.