Investing.com - The U.S. dollar was higher against the Canadian dollar on Thursday as expectations for U.S. interest rate hikes overshadowed an unexpected increase in the number of Americans filing new claims for unemployment benefits last week.
USD/CAD touched highs of 1.1021 and was last trading at 1.0999, 0.59% higher for the day.
The pair was likely to find support at 1.0920 and resistance at around the 1.1030 level, Tuesday’s high and a four month peak.
The Labor Department reported that initial claims for state unemployment benefits rose by 11,000 to a seasonally adjusted 315,000 for the week ended September 6, the highest level since late June, from the previous week’s revised total of 304,000.
Analysts had expected jobless claims to fall by 4,000 to 300,000.
Demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates. A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.
The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
In Canada, data on Thursday showed that new house prices stagnated in July, adding to concerns over the economic outlook.
Sentiment on the commodity linked Canadian dollar was hit earlier Wednesday after official data showed that the annual rate of inflation in China rose less than expected in August, weighing on the demand outlook for crude oil.
Elsewhere, the loonie, as the Canadian dollar is also known, was weaker against the euro, with EUR/CAD advancing 0.78% to 1.4237.