Forex – USD/CAD Moves Higher After U.S. Data

© Reuters. Greenback gains ground vs. loonie in early trade – The U.S. dollar moved higher against its Canadian counterpart on Thursday, after the release of U.S. data, while the Bank of Canada’s decision to raise interest rate on Wednesday continued to dampen demand for the local currency.

was up 0.19% at 1.2465 by 09:30 a.m. ET (13:30 GMT).

The U.S. Labor Department reported on Thursday that initial jobless claims fell by 31,000 to last week from 261,000. Analysts had expected claims to fall to 250,000 last week.

A separate report showed that the number of U.S. housing starts in December, while building permits beat consensus.

Data also showed that manufacturing activity in the Philadelphia region to the lowest level in five months.

The greenback has been pressured lower recently by concerns the global economic recovery will outpace U.S. growth and prompt other major central banks, including the European Central Bank to begin unwinding loose monetary policy at a faster pace.

Meanwhile, sentiment on the Canadian dollar remained vulnerable after the BoC on Wednesday hiked its overnight cash rate to from 1.0%, in a widely anticipated decision.

The bank said recent economic data has been strong, inflation is close to target and the economy is operating roughly at capacity, but warned that uncertainty over the future of NAFTA is clouding the economic outlook.

The loonie was also lower against the euro, with gaining 0.68% to 1.5271.

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