COZfx: USD/CAD hits session lows after Canada GDP data

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COZforex: The US dollar decline to session lows against the Canadian dollar on Thursday after data showed that the Canadian economy expanded at a faster than expected rate in August.

USD/CAD hit 1.0435 amid early US trade, the lowest since Tuesday; the pair subsequently consolidated at 1.0440, shedding 0.36%. Coz forex senior derivatives trader Daniel • Moloney said, USD/CAD is predicted to find support at 1.0450, and a drop through could take it to the next support line of 1.0415. Meanwhile, the pair is predicted to find its first resistance at 1.0509, and a rise through could take it to the next resistance line of 1.0533.

Statistics Canada said gross domestic product expanded 0.3% in August, above expectations for growth of 0.2%. Canada’s economy grew by 0.6% in July. Canadian GDP grew 2% on a yearly basis, beating forecasts for an increase of 1.7%, following annualized growth of 1.5% in July.

The greenback remained supported after the Federal Reserve was more optimistic than anticipated in its assessment of the economy at its monthly meeting on Wednesday, fuelling speculation that it could start scaling back stimulus sooner than expected.

The Fed left its USD85 billion-a-month asset purchase program in place and gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.

"The housing sector has slowed somewhat in recent months," the Fed statement said. However, Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing.

Meanwhile, data on Thursday showed that US initial jobless claims decline in line with expectations last week. The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 25 declined by 10,000 to a seasonally adjusted 340,000.

(COZ forex UK)