Daily Afternoon Report 12.05.2016

Daily Afternoon Report 12.05.2016

The U.S. dollar moved lower against its Canadian counterpart on Thursday, as rising oil prices boosted demand for the commodity-related Canadian currency.

USD/CAD hit 1.2790 during early U.S. trade, the pair’s lowest since May 5; the pair subsequently consolidated at 1.2775, sliding 0.56%.

The pair was likely to find support at 1.2692, the low of May 4 and resistance at 1.2978, the high of May 10.

The Canadian dollar found support as oil prices rebounded after the U.S. Energy Information Administration said on Wednesday that U.S. crude inventories fell 3.4 million barrels to 540 million barrels last week, compared with analyst expectations for an increase of 714,000 barrels.

The loonie was also boosted by news of an expected increase in Canadian oil sand crude output after wildfires disrupted over 1 million barrels of daily production capacity.

Shell (LON: RDS) Canada and Suncor said on Wednesday that they had resumed oil production but at a limited rate.

Though most of the oil plants were not threatened by the fire, many oil workers were forced to flee as the city of Fort McMurray was evacuated.

The news eased concerns over the impact lower crude production could have on the country’s growth.

In the U.S., the Department of Labor said on Thursday that the number of individuals filing for initial job less benefits in the week ending May 6 increased by 20,000 to 294,000 from the previous week’s total of 274,000.

Analysts had expected jobless claims to drop by 4,000 to 270,000 last week.

The loonie was higher against the euro, with EUR/CAD declining 0.77% to 1.4569.