Since forming a bottom across several days at 1.08, USD/CAD has moved in favor of the dollar in a near 38.2% retracement of the move from 1.18129 to 1.07825 at 1.11761. Between yesterday afternoon and this morning, the pair has tried to cross the threshold several times before moving lower. Following the release of Canadian Building Permits at 08:30EST, the currencies have fluctuated in a range that has the average true range (ATR) indicator rising sharply in recent hours. Also adding to the confusion was US initial jobless claims that came in slightly above estimates.
[B]Canadian Building Permits [/B]in Canada came in at smaller than expected decline of 5.4% for April following a 24.4% gain in the previous month. Analysts polled by Bloomberg had expected a sharper fall of 8.9%. While the decline was largely expected, the release proved positive as it comes off the heels of a significant rise in March. Dwelling deeper, residential permits rose 4.1% for the second consecutive gain while non-residentials fell 14.4% following a hefty 49.3% gain prior. The year-over-year decline for the measure came in at 33.9%, far worse than the 18.1% contraction reported in the previous month. Of the provinces measured, six posted advances in permits while four provinces saw contraction.
[B]US Initial Jobless Claims [/B]came in just shy of expectations with a fall of 621,000 in the final week of May. Economists had expected a decline of 621,000 following a loss of 625,000 in the week prior. Continuing claims proved more interesting as the release of 6.735M from 6.750M comes as the first decline in the data in twenty weeks. The measure had been setting new record highs for 18 weeks prior to breaking a 1983 high of 4.713 million. As expected, the largest percentage of those on benefits remains manufacturing with over 19% of the total count receiving temporary aid. Trailing this is the construction industry with 14.8% while admininistrative & support/waste management accounts for 10.3%. Despite the fall in the measure, this may be perceived as a negative as many of those who are now off unemployment benefits are still unemployed. As this continues, retail spending may be hurt in the months ahead and job cuts may not narrow significantly.