Canadian Dollar Strengthens Against Most Majors After CPI Report

The Canadian dollar showed strength against most of its major counterparts Thursday in New York following the release of Consumer Price Index report.

Consumer prices in Canada rose unexpected on a yearly basis in May, but the pace of the increase slowed from the previous month, according to data released Thursday by Statistics Canada.

Consumer prices inched higher by a 15-year low of 0.1% in the 12 months to May 2009, down from the 0.4% increase in April. Economists were looking for consumer prices to slip 0.2%.

Core prices excluding energy and food advanced 2.0% over the 12 months to May, up from the 1.8% rise posted in April. On a monthly basis, prices were up 0.4% in May after easing 0.1% in April.

The loonie extended previous session's uptrend against the US dollar in New York morning deals today. At 10:10 am ET, the loonie climbed to a 2-day high of 1.1236 versus the greenback, compared to yesterday's New York session close of 1.1319.

According to a report released by the U.S. Labor Department today, the initial jobless claims rose to 608,000 from the previous week's revised figure of 605,000. Economists had expected jobless claims to edge up to 604,000 from the 601,000 originally reported for the previous week.

The report also showed that continuing claims fell to 6.687 million in the week ended June 6th from the preceding week's revised level of 6.835 million. This marks the first drop in continuing claims since the week ended January 3rd.

The Canadian dollar traded higher against the euro and the Japanese yen during morning session and hit today's highs of 1.5728 and 85.68, respectively, at around 10:10 am ET.

The loonie also ticked up against the British pound and climbed to a new multi-day high of 1.8348 by about 8:40 am ET.