Forexpros – The U.S. dollar fell to a session low against its Canadian counterpart on Thursday, as sentiment on growth linked currencies was boosted after China’s central bank announced a rate cut, while investors awaited testimony by Federal Reserve Chairman Ben Bernanke later in the day.
USD/CAD hit 1.0221 during early U.S. trade, the pair’s lowest since May 30; the pair subsequently consolidated at 1.0223, shedding 0.51%.
The pair was likely to find support at 1.0137, the low of May 18 and resistance at 1.0295, the session high.
Market sentiment found support after the People’s Bank of China said it will lower benchmark interest rates by 0.25%, effective Friday, in a bid to bolster growth in the world’s second largest economy and counter the effects of a slowdown in global growth.
Meanwhile, solid demand at an auction of Spanish government debt and fresh hopes that European leaders are stepping up efforts to tackle Spain’s banking crisis also bolstered demand for higher-yielding assets.
Investors were looking ahead to Fed Chair Ben Bernanke’s testimony on the U.S. economic outlook before a congressional committee in Washington later in the day, amid speculation that the U.S. central bank is mulling new measures to stimulate growth.
The loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD shedding 0.29% to hit 1.2829.
Earlier Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance last week fell by 12,000 to a seasonally adjusted 377,000, in line with expectations.
The previous week’s figure was revised up to 389,000 from a previously reported 383,000.
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