Forex - USD/CAD off session highs after Canadian GDP data

Investing.com - The U.S. dollar pulled back from session highs against the Canadian dollar on Thursday after data showed that the Canadian economy expanded slightly more than forecast in November.

USD/CAD pulled back from 1.0035, the session high, to hit 1.0014 during early U.S. trade, just 0.01% higher for the day.

The pair was likely to find support at 0.9988, the low of January 24 and resistance at 1.0052, Wednesday’s high.

Statistics Canada said gross domestic product expanded by 0.3% in November, a touch above expectations for growth of 0.2%.

Canada’s economy expanded at an annualized rate of 1.3%, beating expectations for a 1.1% increase, following growth of 1.1% in October.

A separate report showed that Canada’s industrial product price index was flat in November, while raw material prices fell 2.0%

In the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits last week rose by 38,000 to a seasonally adjusted 368,000, compared to expectations for an increase of 20,000 to 350,000.

A separate report showed that personal incomes in the U.S. jumped 2.6% in December, the largest increase in eight years.

Market sentiment remained cautious after data on Wednesday showed that the U.S. economy unexpectedly contracted by 0.1% in the fourth quarter, a sharp slowdown from growth of 3.1% in the preceding quarter.

Meanwhile, the Federal Reserve said Wednesday that it would continue to pursue its easing program and reiterated that it would hold interest rates close to zero until the U.S. unemployment rate falls below 6.5%.

Investors were looking ahead to U.S. data on nonfarm payrolls data on Friday after Wednesday’s ADP nonfarm payroll report showed that the U.S. private sector added 192,000 jobs in January, above expectations for an increase of 165,000.

Elsewhere, the loonie, as the Canadian dollar is also known, was trading close to one-year lows against the euro, with EUR/CAD inching up 0.01% to 1.3586.

Demand for the single currency continued to be underpinned by the view that the crisis in the euro zone has turned a corner.