Forexpros – The U.S. dollar trimmed gains against its Canadian counterpart on Wednesday, as market sentiment improved slightly after data showed U.S. industrial output rose more than expected in October.
USD/CAD pulled back from 1.0288, the pair’s highest since October 12, to hit 1.0255 during U.S. morning trade, still up 0.41%.
The pair was likely to find support at 1.0157, Tuesday’s low and resistance at 1.0327, the high of October 12.
The U.S. Federal Reserve said industrial production climbed 0.7% in October. September’s figure was revised to a 0.1% drop from an original estimate of a 0.2% gain.
Analysts had forecast that industrial output would increase by 0.4%.
Earlier Wednesday, official data showed that the U.S. consumer price index dropped 0.1% in October. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
Year-on-year, consumer prices were up 3.5% after rising 3.9% in the full year through September.
Excluding food and energy costs, consumer prices rose 0.1% in October, broadly in line with expectations, after rising by 0.1% in September.
But concerns over the deepening debt crisis in the euro zone weighed on risk appetite as yields on Italian 10-year bond hovered close to the 7% threshold widely seen as unsustainable in the long term.
The Canadian dollar was slightly lower against the euro, with EUR/CAD inching up 0.05% to hit 1.3831.
Also Wednesday, a spokesman for German Chancellor Angela Merkel said new Italian Prime Minister Mario Monti needed to put into practice austerity pledges made by the outgoing Italian government, in order to quickly restore market confidence.
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