Forex
Investing.com - The U.S. dollar erased gains against its Canadian counterpart on Friday, pulling away from a two-week high as upbeat economic reports from Canada lent support to the local currency, although lower oil prices limited its gains.
USD/CAD pulled away from 1.3139, the pair’s highest since July 11, to hit 1.3079 during U.S. morning trade, steady for the day.
The pair was likely to find support at 1.3008, the low of July 20 and resistance at 1.3191, the high of May 24 and.
Statistics Canada said retail sales rose 0.2% in May, beating expectations for a flat reading and after a downwardly revised 0.8% gain the previous month.
Core retail sales, which exclude automobiles, increased by 0.9% in May, compared to expectations for a 0.3% rise and after a 1.3% climb in April.
A separate report showed that Canada’s consumer price index rose 0.2% in June, exceeding expectations for an uptick of 0.1% and following an increase of 0.4% the previous month.
Year-on-year, consumer prices increased by 1.5% last month, beating expectations for a 1.4% rise.
Core CPI, which excludes the eight most volatile items, was flat in June, in line with expectations and after an uptick of 0.3% in May.
But the Canadian dollar’s gains were limited as lower oil prices weighed on demand for the commodity currency.
The loonie was higher against the euro, with EUR/CAD slipping 0.14% to 1.4410.
In the euro zone, research group Markit said its composite purchasing managers’ index, which measures the combined output of both the manufacturing and service sectors dipped from 53.1 in June to 52.9 in July, above forecasts for 52.5.
Markets were still digesting the European Central Bank’s decision on Thursday to leave monetary policy on hold.
At his monthly press conference, ECB President Mario Draghi said European markets weathered the post-Brexit volatility with “encouraging resilience”, but reiterated that the central bank is ready to act by using all the instruments available under its mandate if necessary.
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