The dollar came under some selling interest yesterday, as USD-bulls took a breather following the strong recovery earlier this week. The Canadian dollar slid after data showed that the Canadian economy unexpectedly contracted in January. Nevertheless, the Loonie was quick to recover and end the day higher against its US counterpart.
USD Retreats After Massive Gains Earlier this Week
The dollar traded lower against most of the other G10 currencies on Thursday. It gained only against GBP and SEK, and somewhat against EUR, while it lost the most against NZD and NOK.
The dollar has been in a recovery mode earlier this week, perhaps due to month-end and quarter-end corporate repatriation of profits, but the recovery stalled ahead of the Easter holidays. USD-bulls preferred to take a breather, even after yesterday’s somewhat encouraging US data. Weekly initial jobless claims dropped to 215k, the lowest level since 1973, while the core PCE index, the Fed’s favorite inflation measure, accelerated to +1.6% yoy after staying for three straight months unchanged at +1.5%. The personal income and spending rates remained unchanged at +0.4% mom and +0.2% mom respectively.
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