Investing.com – The U.S. dollar fell against its Canadian counterpart on Friday, as the release of positive Canadian wholesales data lent support to the loonie, although concerns over geopolitical tensions in Ukraine and the Middle East continued to weigh.
USD/CAD hit 1.0709 during European afternoon trade, the pair’s lowest since July 11; the pair subsequently consolidated at 1.0729, sliding 0.28%.
The pair was likely to find support at 1.0631, the low of July 11 and resistance at 1.0794, the high of July 16.
Official data showed that wholesale sales in Canada rose 2.2% in May, beating expectations for a 0.7% gain, after a 1.4% increase in April, whose figure was revised up from a previously estimated rise of 1.2%.
Data also showed that Canada’s consumer price inflation rose 0.1% last month, in line with expectations, after a 0.5% increase in May.
Core consumer price inflation, which excludes the eight most volatile items, fell 0.1% in June, in line with market expectations, after a 0.5% rise the previous month.
But investors remained cautious after a Malaysian Airlines passenger jet crashed in eastern Ukraine Thursday overnight. All 298 people on board were killed, sharply raising the stakes in a conflict between Kiev and pro-Moscow rebels in which Russia and the West back opposing sides.
The crash came a day after the U.S. and the European Union announced a fresh round of sanctions against Russia, following the annexation of Crimea in April and ongoing tensions in the rest of Ukraine. The U.S. package was the largest round of penalties so far.
Markets were also jittery after Israel announced late Thursday the start of a ground campaign in Gaza after 10 days of aerial and naval bombardments failed to stop Palestinian rocket attacks.
The loonie was higher against the euro, with EUR/CAD shedding 0.30% to 1.4510.
Later in the day, the U.S. was to release preliminary data from the University of Michigan on consumer sentiment.