Daily Afternoon Report 02.02.2017

Daily Afternoon Report 02.02.2017

The U.S. dollar re-approached four-month lows against its Canadian counterpart on Thursday, despite the release of upbeat U.S. data, as the Federal Reserve’s most recent policy statement continued to weigh heavily on the greenback.

USD/CAD hit 1.2980 during early U.S. trade, the session low; the pair subsequently consolidated at 1.2998, retreating 0.38%.

The pair was likely to find support at 1.2967, Tuesday’s low and a four-month trough and resistance at 1.3103, Wednesday’s high.

The U.S. Department of Labor said initial jobless claims decreased by 14,000 in the week ending January 28 to 246,000 from the previous week’s revised total of 260,000.

Analysts had expected jobless claims to drop by 9,000 to 250,000 last week.

The data came after the Fed left interest rates unchanged at the end of its two-day policy meeting on Wednesday, in a widely expected move.

But the greenback remained under pressure as optimism over the strength of the U.S. economy waned after policymakers said that some market-based measures of inflation were still low.

However, the Fed also said that job creations remained solid, inflation had increased and economic confidence was rising.

Meanwhile, the commodity-related Canadian dollar was boosted by higher oil prices on Thursday, as optimism surrounding global production cuts overshadowed a rise in U.S. inventories.

The loonie was little changed against the euro, with EUR/CAD at 1.4045.