Forexpros – The U.S. dollar trimmed losses against the Canadian dollar on Thursday, as market sentiment was hit after comments by European Central Bank President Mario Draghi disappointed expectations for bold easing measures to shore up growth in the euro zone.
USD/CAD pulled away from 1.0003, the session low, to hit 10052 during early U.S. morning trade, inching down 0.05%.
The pair was likely to find support at 0.9989, the low of May 14 and resistance at 1.0129, the high of July 20.
Risk sentiment broadly weakened after Draghi said the ECB may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
The ECB will work out the details of the bond buying program “over the coming weeks”, Draghi said saying the operation would be of a size “adequate to meet its objectives”.
The statement disappointed market expectations for bold steps to counter the debt crisis in the euro zone, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
The ECB left interest rates unchanged at a record low 0.75% earlier.
Meanwhile, the loonie also came under pressure as crude oil for delivery in September tumbled 1.54% to trade at USD87.54 a barrel on the New York Mercantile Exchange.
Raw materials, including oil account for about half of Canada’s export revenue.
Elsewhere, the Canadian dollar was higher against the euro with EUR/CAD shedding 0.29%, to hit 1.2259.
Also Thursday, the U.S. Department of Labor said the number of people who filed for unemployment assistance last week rose to a seasonally adjusted 365,000, from an upwardly revised 357,000 in the preceding week.
Analysts had expected initial jobless claims to rise to 370,000 last week.
Later in the day, the U.S. was to release government data on factory orders.
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