Canadian Dollar gives away earlier gains on hawkish Fed and strong US data

• Upbeat US data and hawkish comments by Fed members Williams and Bostic throw a spanner on Canadian Dollar’s recovery
• US Initial Jobless Claims and housing data endorse belief in strong labor market, hot inflationary trends. 
• USD/CAD pullback loses steam right above 1.3730 support area.

The Canadian Dollar (CAD) has given away previous gains and is practically unchanged on the daily chart, as the US Dollar bounced up on Thursday’s New York session. Strong US macroeconomic data and hawkish comments from Federal Reserve (Fed) policymakers have supported the USD.

Fed’s Williams has reiterated the idea that there is no urgency to rate cuts, putting the brakes on the Canadian Dollar’s appreciation. Somewhat later, Atlanta Fed CEO, Raphael Bostic warned that the easing cycle will not start until the end of the year, providing further support to the US Dollar.

Earlier on Thursday, US Initial Jobless Claims remained steady at relatively low levels last week. At the same time, the Philadelphia Fed Manufacturing Survey posted its best reading in a year, adding to the evidence of the strong US economic momentum. US Existing Home Sales declined in March although their median price jumped 4.8% over the last twelve months, suggesting an inflationary contribution to the Consumer Price Index (CPI).
 

Daily digest market movers: USD/CAD finds support on the back of strong US data

• Canadian Dollar is flat on Thursday, as higher US yields have buoyed the US Dollar to regain all the ground lost during Thursday’s Asian and European sessions.
   
• US Weekly Jobless Claims remain steady at 212K in the week of April 12, against expectations of an increase to 215K.
   
• Philadelphia Fed Manufacturing Survey has increased to a 15.5 reading in April from 3.2 in March. The market had anticipated a decline to 1.5.
   
• Existing Home Sales declined 4.3% in March after a 9.5% increase in February, although these data have been offset by the 4.8% yearly increment of the median sales price.
   
• Fed’s Williams has stuck to the line that Fed decisions will be data-driven, reiterating that there is no rush to cut interest rates.
   
• Fed’s Bostic affirmed that the pathway to the 2% inflation rate is slow and hat the bank will not be able to cut rates until year-end.
   
• On Wednesday, US Beige Book reflected steady economic growth combined with sticky inflation expectations, a combination that has prompted investors to dial down Fed easing bets.