The dollar traded lower across the board as increased risk-appetite helped the Loonie extend gains to the 0.9956 mark and the euro climb to 1.3677. The Nasdaq led today's gains, trading higher by nearly 1.3% while the Dow Jones and S&P 500 edged up by around 0.8%. Crude oil bounced by around 2.4% to trade above the $86-mark on Wednesday as EIA inventory data released earlier today posted an unexpected draw on the week with crude supplies decreasing by 2.2 million barrels.
Economic reports released today included March CPI, retail sales and business inventories. The headline consumer price index increased by 0.1% in March versus a flat reading in the previous month which climbing higher by 2.3% compared with a 2.1% reading in the year prior. The excluding food and energy CPI figures were flat on a monthly basis and higher by 1.1% on a yearly basis. Retail sales improved by more than forecast in March -- the headline figure printed at 1.6% from an upwardly revised 0.5% a month prior. The excluding automobiles reading improved by 0.6%, beating estimates for an increase of 0.5% from 1.0% a month earlier. Rounding out today's reports was a strong reading in the February business inventories report, which posted a 0.5% increase from a 0.2% reading previously.
Fed Chairman Bernanke's Congressional testimony before the Joint Economic Committee provided few surprises as he reiterated the outlook for a moderate recovery and offering a tepid assessment of the labor market. Bernanke also highlighted the current sluggishness in the housing market, referring to it as significant restraints on the pace of the recovery. Meanwhile, the Fed's Beige book report showed that overall economic activity increased somewhat since the last report across all Fed districts except St Louis. However, it noted that the labor market generally remains weak.
The Loonie holds steady around the parity mark. Canadian Finance Minister Jim Flaherty downplayed the currency's strengthening saying it reflects improving economic fundamentals. USDCAD will find support around 0.9960, followed by 0.9930 and 0.99. Subsequent floors are eyed at 0.9870 backed by 0.9840 and 0.98. A move past the 1.00-mark will encounter interim resistance at 1.0020, followed by 1.0060 and 1.01. Additional gains will target 1.0140, followed by 1.0165 and 1.02.