The USD was trading close to five-month highs against the Canadian dollar on Monday, after Friday’s unexpectedly weak Canadian inflation data reinforced expectations that the Bank of Canada would hold off on hiking interest rates. USD/CAD hit 1.0100 during early U.S. trade, the pair’s highest since July 27; the pair subsequently consolidated at 1.0093, gaining 0.35%. The pair was likely to find support at 1.0063, the session low and resistance at 1.0165, the high of July 26 2012. Official data showed that the annual rate of consumer inflation in Canada remained unchanged at a three-year low of 0.8% in December, compared to forecasts for an increase to 1.2%. The data came two days after BoC Governor Mark Carney said said rate hikes were less imminent, citing a weaker economic outlook. Earlier Monday, official data showed that U.S. orders for long lasting manufactured goods rose more than forecast in December. The Commerce Department said U.S. durable goods orders, which include transportation items, rose by a seasonally adjusted 4.6% in December, beating expectations for a 1.8% gain. Core durable goods orders, excluding volatile transportation items, rose by a seasonally adjusted 1.3% last month, compared to expectations for a 0.7% increase. the Canadian dollar was trading close to eight-month lows against the euro, with EUR/CAD up 0.40% to 1.3585, as demand for the single currency continued to be underpinned by optimism that the debt crisis in the euro zone has turned a corner.
EasyForexNews Research Team