Forex - USD/CAD erases gains after US Canadian data

© Reuters. Greenback turns lower vs. loonie, U.S. data weighs

Investing.com - The U.S. dollar erased gains against its Canadian counterpart on Thursday, pulling away from a nearly two-week high as mixed U.S. economic reports dampened demand for the greenback, while a strong Canadian economic growth report supported the local currency.

was down 0.48% at 1.2558 by 09:30 a.m. ET (13:30 GMT), off a nearly two-week high of 1.2663 hit overnight.

The U.S. Labor Department reported on Thursday that the number of people who filed for unemployment assistance last week .

However, a separate report showed that U.S. consumer spending , while core PCE prices inched up tepidly.

The greenback had strengthened broadly after a batch of upbeat U.S. data on Wednesday, including a .

Market participants were now eyeing the monthly U.S. nonfarm payrolls report due on Friday, for more indications on the strength of the economy.

In Canada, official data on Thursday showed that gross domestic product rose in June, exceeding expectations for a growth rate of only 0.1%. Canada's economy grew at a rate of 0.6% in the previous month.

Year-over-year, Canada's increased by 4.5% in the second quarter, beating projections for a growth rate of 3.7%.

Meanwhile, bounced off a five-week low on Thursday, also lending some support to the commodity-related Canadian dollar, but gains were expected to remain limited as markets were still .

The loonie was higher against the euro, with declining 0.74% to trade at 1.4885.

Sentiment on the euro was fragile following reports that a growing number of European Central Bank officials are concerned by the recent strength of the currency.

Earlier in the day, data showed that inflation in the euro area rose to an annualized in August, but underlying inflation remained unchanged at .

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