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Forex - USD/CAD up as oil dips after disappointing U.S. data

Published 05/26/2011, 09:31 AM
Updated 05/26/2011, 09:31 AM
Investing.com – The U.S. dollar was trading close to a two-month high against its Canadian counterpart on Thursday, as crude oil, Canada’s largest export trimmed gains after disappointing U.S. growth and employment data.

USD/CAD hit 0.9801 during early U.S. trade, the daily high; the pair subsequently consolidated at 0.9795, gaining 0.22%.

The pair was likely to find support at 0.9730, the low of May 23 and resistance at 0.9852, the high of March 21.

The U.S. Commerce Department said its second estimate of gross domestic product growth was unrevised at annual rate of 1.8% in the first quarter, below economists' expectations for a 2.1% increase.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, expanded 2.2% in the three months to March, disappointing expectations for a 2.7% increase.

Separately, the Labor Department said the number of individuals filing for initial jobless benefits last week unexpectedly rose by 10K to a seasonally adjusted 424K, from an upwardly revised 414K in the preceding week. Analysts had expected initial jobless claims to fall to 400K.

Following the data, crude oil for delivery in July slid 0.15% on the New York Mercantile Exchange, to trade at USD100.95 a barrel, pulling away from a session high of USD101.90.

Raw materials, including oil account for about half of Canada’s export revenue.

The loonie was also lower against the euro, with EUR/CAD jumping 0.90% to hit 1.3891.

The euro found support after European Financial Stability Facility Chief Executive Officer Klaus Regling said Wednesday that China was “clearly interested” in buying Portuguese bailout bonds when the EFSF sells them in June.

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