USD/CAD pushes higher despite weak data

Key Movers

Investors proceeded with caution, waiting from comments by Federal Reserve Chair Jerome Powell at the annual symposium in Jackson Hole. The greenback encountered pressure yesterday, largely due to a significant drop in treasury yields. This decline followed the release of data indicating a near stagnation of US business activity in August. The tally of Americans filing for unemployment benefits decreased by 10,0000 compared to the previous week, reaching 230,000 for the week ending on August 19th. This was below the market’s projected 240,000. Concurrently, ongoing claims dropped to 1,702,000 for the week ending on August 12th. This result was also below the market’s estimation of 1,708,000 and closely aligned with the 6-month lows in July. These figures collectively suggest that individuals seeking employment are finding opportunities, underlining the continuing strength of the US Labor Market. The US Census Bureau reported a more substantial decline in July’s durable goods orders than initially anticipated. Orders in the US plummeted by 5.2% to 285.9 billion.

The EUR/USD pair reestablished its momentum, bouncing back to the 1.0850 range following a decline to around 1.0800 earlier in the day. The USD encountered difficulties in maintaining its strength, prompted by comments from the Fed's Patrick Harker suggesting that the central bank might keep the policy rate unchanged throughout this year. This comment aided in pushing the currency pair towards higher levels.

The GBP/USD pair remains situated in the downside zone, although it managed to regain ground above the 1.2650 level, offsetting a minor fraction of its losses recorded earlier in the day. Despite bullish market sentiment, the impact of weakened British Purchasing Manager Index (PMI) data on Wednesday could not be offset. The agency's data revealed that manufacturing activities hit their lowest point since the pandemic began, attributed to businesses operating below their capacity due to a grim demand outlook.