Daily Afternoon Report 16.03.2017

The U.S. dollar was almost unchanged against its Canadian counterpart on Thursday, after the release of mostly positive U.S. economic reports, as the Federal Reserve’s latest policy statement continued to weigh and higher oil prices supported the Canadian currency.

USD/CAD hit 1.3276 during early U.S. trade, the pair’s lowest since February 28; the pair subsequently consolidated at 1.3296.

The pair was likely to find support at 1.3219, the low of January 23 and resistance at 1.3402, the high of March 2.

The U.S. Department of Labor said initial jobless claims declined by 2,000 to 241,000 in the week ending March 11 from the previous week’s total of 243,000. Analysts expected jobless claims to fall by 3,000 to 240,000 last week.

The U.S. Commerce Department said housing starts rose 3.0% to 1.288 million units last month from January’s total of 1.251 million units. Analysts had an increase of 1.4%.

On a less positive note, building permits dropped 6.2% to1.213 million units in February from 1.285 million the month before. Economists had forecast permits to fall by just 2.6%.

Separately, the Federal Reserve Bank of Philadelphia said its Philly Fed manufacturing index fell to 32.8 this month from 43.3 in February, compared to expectations for a decline to 30.0.

The reports came a day after the Fed increased interest rates by 25 basis points to 1.00% from 0.75%, as expected.

The greenback weakened broadly following the decision, as the central bank’s stance was seen as less hawkish than expected by sticking to projections of three total rate hikes in 2017 and not four as some traders had hoped for.

Meanwhile, the commodity-related Canadian dollar found support amid rising oil prices on Thursday, as news on Wednesday of an unexpected decline in U.S. stockpiles continued to boost the commodity.

Also, Thursday, Statistics Canada said that foreign securities purchases rose by C$6.20 billion in January, disappointing expectations for an increase of C$9.45 billion.

The loonie was fractionally higher against the euro, with EUR/CAD easing 0.08% to 1.4287.