Forex - USD/CAD erases gains on US data oil rally

© Reuters. Greenback pulls bak from session highs, turns lower vs. loonie

Investing.com - The U.S. dollar erased gains against its Canadian counterpart on Thursday, pulling away from a recent three-week high after U.S. economic reports came in below market expectations and as sharply higher oil prices lent support to the commodity-related Canadian currency.

pulled back from 1.2735, the pair’s highest since July 14, to hit 1.2685 during early U.S. trade, down 0.13%.

The pair was likely to find support at 12627, the low of August 7 and resistance at 1.2750, the high of July 14.

The greenback weakened after the U.S. Commerce Department said last month.

The U.S. Department of Labor said separately said that in the week ending August 5.

The reports came after a series of upbeat U.S. employment reports had fueled expectations the Federal Reserve will stick to its plans for a third interest rate hike this year.

In Canada, official data showed that the new housing price index rose in June, confounding expectations for an uptick of 0.4%.

But the Canadian dollar was supported by a jump in crude prices on Thursday, amid growing optimism that the global oil supply glut is beginning to resorb itself.

The loonie was also higher against the euro, with sliding 0.27% to 1.4893.

Market participants also continued to focus on mounting tensions between Washington and Pyongyang.

North Korea's state media said on Thursday that Pyongyang will develop a plan by mid-August to launch intermediate-range missiles at the U.S. territory of Guam.

The comments came after U.S. President Donald Trump said earlier in the week that if it continued its threats.

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