Investing.com - The U.S. dollar dropped against its Canadian counterpart on Friday, as demand for the loonie strengthened after the release of upbeat Canadian inflation and retail sales data, while investors awaited remarks by Federal Reserve officials later in the trading session.
USD/CAD hit 1.1174 during European afternoon trade, the pair''s lowest since Wednesday; the pair subsequently consolidated at 1.1186, declining 0.50%.
The pair was likely to find support at 1.1122, the low of March 19 and resistance at 1.1279, Thursday''s high.
Official data showed that Canada''s core consumer price inflation, which excludes the eight most volatile items, rose 0.7% in February, exceeding expectations for a 0.5% gain, after a 0.2% gain the previous month.
Consumer price inflation in Canada rose 0.8% last month, compared to expectations for a 0.6% increase, after a 0.3% uptick in January.
A separate report showed that Canada''s core retail sales, which exclude automobiles, increased by 1% in January, beating expectations for a 0.9% rise. Core retail sales in December were revised down to a 1.5% decline from a previously estimated 1.4% drop.
Retail sales rose 1.3% in January, more than the expected 0.8% advance. December''s retail sales were revised down to 1.9% fall from a previously estimated 1.8% decline.
Markets were eyeing comments by a number of Fed officials later Friday, after Fed Chair Janet Yellen surprised markets mid-week by suggesting the possibility of raising interest rates as soon as next year.
Earlier Friday, Fitch Ratings affirmed U.S. long-term foreign and local currency credit ratings at AAA with a stable outlook, taking the country off negative ratings watch.
Separately, the U.S. expanded sanctions to 20 more prominent Russians, including allies of Russian President Vladimir Putin, amid mounting tensions over Moscow''s annexation of Crimea.
The loonie was higher against the euro, with EUR/CAD retreating 0.36% to 1.5414.
In the euro zone, data showed that the current account surplus widened to €25.3 billion in January, from €20.0 billion in December, whose figure was revised down from a previously estimated surplus of €21.3 billion.
Analysts had expected the current account surplus to narrow to €18.4 billion in January.
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