Forex - USD/CAD extends gains, rises to daily high

Forex News – The U.S. dollar extended gains against its Canadian counterpart on Thursday, climbing to a daily high as safe haven demand remained supported following decisions by the European Central Bank and the Bank of England.

USD/CAD hit 1.0482 during early U.S. trade, the daily high; the pair subsequently consolidated at 1.0468, gaining 0.62%.

The pair was likely to find support at 1.0349, the low of September 30 and resistance at 1.0570, Wednesday’s high.

Earlier in the day, the European Central Bank announced new measures to refinance European lenders and said it will resume buying bank bonds. The announcement came after the bank left its interest rate unchanged at 1.5%.

But market sentiment remained downbeat after outgoing ECB President Jean-Claude Trichet said the euro zone economy remained subject to “particularly high uncertainty and intensified downside risks."

The announcement came after the Bank of England implemented a fresh round of stimulus measures to bolster growth in the faltering U.K. economy.

The Canadian dollar was largely unchanged after official data showed that Canadian building permits fell sharply in August, down for the second straight month.

Statistic Canada said the number of new building permits issued fell by a seasonally adjusted 10.4% in August, confounding expectations for a gain of 0.6%.

July’s figure was revised down to a drop of 0.4% from a previously reported increase of 6.3%.

The loonie was also lower against the euro, with EUR/CAD rising 0.59% to hit 1.3969.

Also Thursday, the U.S. Department of Labor said initial jobless claims rose less-than-expected last week, increasing to a seasonally adjusted 401K, from an upwardly revised 395K the previous week.

Analysts had expected jobless claims to rise by 411K last week.