The U.S. dollar rose to more than four year highs against the weaker Canadian dollar on Thursday, as investors turned their attention to Fridays’ U.S. nonfarm payrolls report for indications on the timing of further reductions to the pace of the Federal Reserve’s stimulus program.
USD/CAD hit highs of 1.0872, the strongest level since October 2009, and was last up 0.34% to 1.0856.
The pair was likely to find support at 1.0817, the session low and resistance at 1.0960.
Demand for the U.S. dollar continued to be underpinned after Wednesday’s minutes of the Fed’s December meeting showed that the bank cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion, reducing it to USD75 billion-a-month.
The minutes also showed that officials were keen to stress that further reductions were not on a “preset course” and would be undertaken in “measured” steps.
The minutes came on the heels of a report showing that the U.S. private sector added the largest number of jobs since November 2012 last month. ADP nonfarm payrolls rose by 238,000 in December, easily surpassing expectations for an increase of 200,000.
In a report released on Thursday, the Labor Department said the number of people who filed for unemployment assistance in the U.S. last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000.
Economists had expected jobless claims to decline by 10,000.
In Canada, official data showed that the number of new building permits issued in Canada fell significantly more-than-expected in November, while a separate report showed that housing starts rose less-than-expected in December.
Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD up 0.28% to 1.4728.