The Canadian dollar that dropped to multi-day lows against the currencies of Europe and Japan in early Thursday New York deals stabilized in mid-morning deals as the price of crude oil recouped some of its earlier losses.
Light Sweet Crude Oil (WTI) futures for December delivery, which finished lower yesterday amid recovering U.S. dollar and worries over surging inventories, staged a rebound to hit as high as $82.28, up $0.34, around 10:10 am ET.
The Canadian dollar that fell to a 3-day low of 1.4271 against the euro around 9:35 am ET bounced back shortly. At present, the euro-loonie pair is trading at 1.4248 with a near-term support is seen around the 1.4260 and resistance at 1.4330.
Eurozone economic confidence improved to 104.1 in October from 103.2 in September, survey results from the European Commission showed today. The expected reading was 103.5.
Traders also considered data showing the adjusted German jobless rate held steady at 7.5 percent in October, while economists had forecast 7.4 percent. The number of jobless fell by 3,000 to a seasonally adjusted 3.153 million, figures from the nation’s Labor Office showed.
The Canadian dollar that reached a 3-day low of 78.93 against the yen around 9:35 am ET Thursday moved on hold thereafter. The loonie-yen pair is presently lingering around the 79.0 level and a move below the 78.70 support could set its weakest mark in nearly 2 months.
As widely expected, the Bank of Japan today unanimously decided to retain its overnight call rate at 0.0-0.1%. The size of the bank’s asset purchase program was also maintained at 5 trillion yen, while the size of its cheap fund supplying operation was kept at 30 trillion yen.
The Bank of Japan may consider expanding its JPY5 trillion asset purchasing program if economic conditions deteriorate, Governor Masaaki Shirakawa said Thursday.
“If the economic situation changes significantly, the BoJ may expand the fund,” Shirakawa told reporters in Tokyo.
Meanwhile, the central bank lowered its growth forecast for the Japanese economy citing weak global conditions and the strong yen.
The Bank of Japan now expects gross domestic product to grow 2.1% in the current fiscal year, revised down from the 2.6% expansion predicted in July. The growth outlook for the next fiscal year was also lowered to 1.8% from 1.9%.
Earlier in the day, Japan’s Ministry of Economy, Trade and Industry said that retail sales in Japan declined a seasonally adjusted 3.0 percent on month in September. That was sharply lower than analyst expectations for a 0.5 percent monthly decline.
On an annual basis, retail sales were up just 1.2 percent – again missing estimates for a 3.3 percent increase following the 4.3 percent gain in the previous month.
The Canadian dollar that reached as high as 1.0238 against the US dollar around 8:30 am ET staged a brief retreat shortly to hit as low as 1.0278 around 9:35 am ET. However, the bearish reversal was short-lived and the loonie snapped back to stay around its session’s highs.
First-time claims for unemployment benefits in the U.S. unexpectedly saw a modest decrease in the week ended October 23rd, according to a report released by the Labor Department today, with jobless claims falling to a three-month low.
The report showed that initial jobless claims fell to 434,000 from the previous week’s revised figure of 455,000. The decrease surprised economists, who had expected claims to edge up to 458,000 from the 452,000 originally reported for the previous week.