Daily Afternoon Report 18.01.2017
The U.S. dollar trimmed gains against its Canadian counterpart on Wednesday, after the Bank of Canada left interest rates unchanged, although positive U.S. economic reports still lent support to the greenback.
USD/CAD pulled away from 1.3132, the session high, to hit 1.3064 during U.S. morning trade, still up 0.19%.
The pair was likely to find support at 1.3016, Tuesday’s three-month low and resistance at 1.3191, Tuesday’s high.
In a widely expected move, the BoC said it was leaving its overnight cash rate unchanged at 0.50%, a record low where it has been since July 2015.
The central bank also held the bank rate steady at 0.75% and left the deposit rate at 0.25%.
In the U.S., official data earlier showed that industrial production rose 0.8% in December, better than expectations for a 0.6% advance.
However, manufacturing production increased by 0.2% last month, disappointing forecasts for a 0.4% rise.
The report came after the U.S. Commerce Department said consumer prices gained 0.3% in December, in line with expectations and after a 0.2% advance the previous month.
Year-over-year, consumer prices increased 2.1% last month, in line with forecasts and after a 1.7% rise in November.
The greenback had weakened broadly after Donald Trump said to the Wall Street Journal on Monday that U.S. companies could not compete with China “because our currency is too strong. And it’s killing us”.
In separate remarks, a senior adviser to the U.S. President-elect warned about the risk from a stronger dollar.
The loonie was higher against the euro, with EUR/CAD slipping 0.10% to 1.3958.