Downbeat U.S. inflation data and Upbeat Canada manufacturing sales report

August 16, 2016

Downbeat U.S. inflation data and Upbeat Canada manufacturing sales report

This article is originally referred from Traders Trust Daily Afternoon Report

The U.S. dollar trimmed losses but remained close to a one-and-a-half month trough against its Canadian counterpart on Tuesday, weighed the release of downbeat U.S. inflation data and as an upbeat manufacturing sales report from Canada lifted the local currency.

The pair was likely to find support at 1.2714, the low of June 24 and resistance at 1.2976, Monday’s high.

The U.S. Commerce Department said consumer prices were unchanged in July from a month earlier, compared to expectations for a 0.1% gain. Year-over-year, consumer prices increased 0.8%, below expectations for a gain of 0.9%.

Core CPI, which excludes food and energy costs, increased by 0.1%, below forecasts that had expected it to remain in line with the 0.2% advance seen in July.

A separate report showed that U.S. housing starts rose 2.1% to hit 1.211 million units last month from June’s total of 1.186 million units. Analysts had expected a dip 0.8% to 1.180 million.

Meanwhile, the number of building permits issued declined 0.1% to 1.152 million units last month from 1.153 million. Economists had forecast a gain of 0.6% to 1.160 million units in July.

The greenback regained some ground however after New York Federal Reserve head William Dudley said the U.S. is edging closer toward the point in time where it will be appropriate to raise interest rates further.

In Canada, official data showed that manufacturing sales rose 0.8% in June, exceeding expectations for a 0.7% gain and after a 1.0% decline the previous month.

The loonie was lower against the euro, with EUR/CAD edging up 0.17% to 1.4478.

The euro found support after the ZEW Centre for Economic Research earlier said that its index of German economic sentiment rose to 0.5 this month from July’s reading of -6.8 that had been its lowest level since November 2012. Analysts had expected the index to increase to 1.8 in August.

The index of euro zone economic sentiment increased to 4.6 in August from -14.7 a month earlier. Consensus was looking for a read of -6.3.

Original Source: Traders Trust Daily Afternoon Report

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