Daily Afternoon Report 27.01.2017

The U.S. dollar trimmed gains against its Canadian counterpart on Friday, after the release of downbeat U.S. economic reports, while lower oil prices weighed on demand for the commodity-related Canadian currency.

USD/CAD pulled back from 1.3131, the session high, to hit 1.3111 during early U.S. trade, still up 0.15%.

The pair was likely to find support at 1.3051, Thursday’s low and resistance at 1.3167, the high of January 25.

The U.S. Bureau of Economic Analysis said gross domestic product grew 1.9% in the fourth quarter of 2016, disappointing expectations for 2.2% and after a 3.5% growth rate in the three months to September.

Separately, the Census Bureau said U.S. durable goods orders fell 0.4% in December, compared to expectations for a 2.6% gain.

Core durable goods orders, which exclude transportation items increased by 0.5% last month, in line with expectations.

The greenback had strengthened mildly after U.S. President Donald Trump suggested late Thursday the implementation of a 20% tax on Mexican goods to pay for a border wall.

The comments came after the U.S. President ordered construction of a U.S.-Mexican border wall and punishment for cities shielding illegal immigrants.

Meanwhile, the Canadian dollar was hit by declining oil prices on Friday, as concerns over a rise in U.S. crude supplies weighed.

The loonie was lower against the euro, with EUR/CAD gaining 0.43% to 1.4041.