Canadian Dollar appreciates for the second consecutive day as US Jobless Claims increase beyond expectations.
Fed’s Harker has warned that it is too early to cut interest rates.
The USD/CAD is gathering bearish traction and approaches an important support area at 1.3460.
The Canadian Dollar (CAD) is trading higher for the second consecutive day on Thursday. US data revealed that claims for unemployment insurance increased at a larger-than-expected extent in the last week of March, which keeps the US Dollar on the defensive.
These figures coupled with the unexpectedly soft ISM Services PMI data seen on Wednesday are feeding hopes that the Federal Reserve (Fed) will start cutting rates in June. This sentiment has put a lid on the US Treasury yield rebound and is pushing the US Dollar lower against its main rivals.
Philadelphia Fed President Patrick Harker has warned that inflation is still too high to start lowering borrowing costs, a similar line to Fed Chair Powell’s comments on Wednesday. Later on Thursday some more Fed policymakers are expected to hit the wires, although the main focus is on Friday’s US Nonfarm Payrolls report.
In Canada, the trade surplus increased well beyond expectations in February due to a strong increase in exports, which has provided additional support to the CAD.
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