The U.S. dollar edged up against its Canadian counterpart on Wednesday, to trade near three-and-a-half year highs after the release of upbeat U.S. employment data added to expectations for the Federal Reserve to soon begin tapering its monthly asset purchases.
USD/CAD hit 1.0678 during early U.S. trade, the pair''s highest since June 2010; the pair subsequently consolidated at 1.0660, adding 0.09%.
The pair was likely to find support at 1.0614, the low of December 2 and resistance at 1.0853.
The greenback strengthened broadly after data showed that U.S. non-farm private employment rose at the strongest pace in nine months in November, fuelling optimism over the U.S. labor market.
Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 215,000 last month, blowing past expectations for an increase of 173,000.
The previous month’s figure was revised up to a gain of 184,000 from a previously reported increase of 130,000.
A separate report showed that the U.S. trade deficit narrowed to a seasonally adjusted USD40.6 billion in October, from a deficit of USD43.0 billion in September, whose figure was revised from a previously reported deficit of USD41.8 billion.
Analysts had expected the U.S. trade deficit to narrow to USD40 billion in October.
In Canada, official data showed that the trade balance swung into a surplus of CAD0.1 billion in October, from a deficit of CAD0.3 billion the previous month. Analysts had expected the trade deficit to widen to CAD0.7 billion in October.
The loonie was higher against the euro, with EUR/CAD shedding 0.27% to 1.4432.
In the euro zone, official data showed that retail sales fell 0.2% in October, confounding expectations for a 0.3% rise, after a 0.6% decline the previous month.
The report came after Markit said that the bloc''s final services purchasing managers'' index inched up to 51.2 in November, up from a preliminary reading of 50.9 and compared to 51.6 in October.
Germany''s services PMI rose to 55.7 in November, up from a preliminary reading of 54.5 and compared to 52.9 in October.
Later in the day, the Institute of Supply Management was to release its services PMI.
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