Daily Afternoon Report 22.12.2016
The U.S. dollar rose to a three-and-a-half week high against its Canadian counterpart on Today, helped by an upbeat U.S. economic growth report, while mixed data from Canada weighed on the local currency.
Trading volumes were expected to be thin this week as traders were beginning to unwind positions ahead of the Christmas holiday.
USD/CAD hit 1.3504 during early U.S. trade, the pair’s highest since November 28; the pair subsequently consolidated at 1.3496, climbing 0.63%.
The pair was likely to find support at 1.3353, yesterday’s low and resistance at 1.3542, the high of November 28.
The U.S. Commerce Department said that gross domestic product grew at an annual rate of 3.5% in the three months ended September 30, up from a previous estimate of 3.2% and above expectations for a reading of 3.3%.
Preliminary data pegged U.S. growth at 2.9% in the third quarter. The U.S. economy grew 1.4% in the second quarter.
Another report showed that U.S. durable goods orders dropped 4.6% in November, compared to expectations for a 4.7% decline. Core durable goods orders, which exclude transportation items, rose 0.5%, beating expectations for an uptick of 0.2%.
On a less positive note, the U.S. Labor Department said that initial jobless claims rose by 21,000 to 275,000 in the week ending December 16 from the previous week’s total of 254,000.
Analysts had expected jobless claims to rise by 2,000 last week.
At the same time, Statistics Canada reported on Today that retail sales increased 1.1% in October, exceeding expectations for a 0.2% rise. Core retail sales, which exclude automobiles, gained 1.4% in October, beating expectations for a 0.7% gain.
Data also showed that Canada’s consumer price index slipped 0.4% last month, compared to expectations for a 0.2% fall. Year-on-year, consumer prices increased 1.2% in November, below expectations for a 1.4% rise.
The loonie was lower against the euro, with EUR/CAD advancing 0.99% to 1.4118.