Investing.com - The U.S. dollar slid lower against its Canadian counterpart on Thursday as uncertainty over whether the Federal Reserve will hike rates this month and fears over the threat of deflation in China clouded market sentiment.
USD/CAD eased 0.19% to 1.3235, but was off lows of 1.3187.
In the U.S., data on Thursday showed that jobless claims ticked higher last week but remained in territory consistent with a strengthening labor market.
The Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 6,000 to 275,000 from the previous week’s revised total of 281,000, remaining in territory consistent with a strengthening labor market.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was fluctuating between small gains and losses and was last at 96.01.
The greenback remained on the defensive amid heightened uncertainty over whether recent turmoil in global financial markets would prompt the Fed to hold off raising short term interest rates at its upcoming meeting next week.
In Canada, data showed that new home prices rose in July, pushed higher by gains in Toronto’s housing market.
The new house price index rose 0.1%, slightly short of forecasts for a 0.2% gains.
Another report showed that Canadian industrial capacity utilization fell again in the second quarter, led lower by declines in the manufacturing, mining and oil industries.
Earlier Thursday, market sentiment was hit by renewed concerns over slowing growth in China after data showing that while the annual rate of inflation in China edged higher in August producer prices fell at the fastest rate in six years.
Official figures showed that the prices charged by China’s manufacturers fell by an annualized 5.9% in August. It was the largest decline since late 2009 and underlined fears over a China-led slowdown in global growth.
Elsewhere, the loonie was slightly higher against the euro, with EUR/CAD edging down 0.14% to 1.4840.