Investing.com - The U.S. dollar was almost unchanged against its U.S. counterpart in subdued trade on Monday, as Friday''s inflation data out of Canada continued to boost the loonie, while positive U.S. data also lent support to the greenback.
USD/CAD hit 1.0874 during European afternoon trade, the session high; the pair subsequently consolidated at 1.0861, inching up 0.01%.
The pair was likely to find support at 1.0817, the low of May 9 and resistance at 1.0909, the high of May 23.
The Canadian dollar was boosted after official data on Friday showed that the annual rate of inflation rose to the central bank’s target of 2% for the first time in in two years in April, up from 1.5% the previous month.
The annual core rate, which excludes volatile elements such as some food and energy prices, rose 1.4%, as expected.
Canadian consumer prices rose 0.3% in April from a month earlier, also in line with forecasts.
The data sparked expectations that the Bank of Canada could tone down its view on ''downside risks to inflation'', possibly as soon as its next rate review in June.
Meanwhile, the greenback remained supported after data on new home sales on Friday added to signs of a recovery in the housing market.
The Commerce Department reported that sales of new homes rose by a larger-than-expected 6.4% to 433,000 in April, after two months of decline. Analysts had been expecting a figure of 425,000. March''s number was revised up from 384,000 to 407,000.
The loonie was fractionally lower against the euro, with EUR/CAD edging up 0.07% to 1.4815.
Trade volumes were expected to remain thin on Monday with U.K. markets closed for a public holiday and markets in the U.S. remaining shut for the Memorial Day holiday.