On Friday the U.S. dollar slid to three-month lows against its Canadian peer, as a series of disappointing U.S. economic
reports continued to weigh on the buck and positive data from
Canada supported the local currency.
Markets expect the U.S. to release data on consumer prices and consumer sentiment later in the session.
USD/CAD hit 1.2089 during early U.S. trade, the pair's lowest since January 21; the pair subsequently consolidated at 1.2132, declining 0.47%. The pair was likely to find support at 1.2059, the low of January 21 and resistance at 1.2329, Thursday's high.
The U.S. Bureau of Labor Statistics said that consumer prices rose 0.2% last month, confounding expectations for an increase of 0.3%, after a 0.2% uptick in February.
U.S. consumer prices dipped 0.1% year-on-year in March, compared to expectations for a 0.1% rise, after a flat reading the previous month.
Core consumer prices, which exclude food and energy, rose 0.2% last month, in line with expectations and after a 0.2% gain in February, coming after a series of disappointing U.S. data published throughout the week fuelled speculation that the Federal Reserve could delay hiking interest rates until late 2015, instead of tightening midyear.
Separately, Statistics Canada said that retail sales rose 1.7% in February, beating expectations for a 0.2% gain and after a revised 1.4% decline the previous month.
Core retail sales, which exclude automobiles, rose 2.0% in February, more than the expected 0.5% rise, after a revised 1.5% drop the previous month.
Numbers also showed that Canadian consumer prices ticked up 0.7% last month, compared to expectations for an increase of 0.5%, after 0.9% rise in February. Core consumer prices, which exclude the eight most volatile items, rose 0.6% in March, exceeding expectations for a 0.3% gain, after a 0.6% increase the previous month.
The Canadian dollar was higher against the euro, with EUR/CAD retreating 0.51% to 1.3047.
