Investing.com – The U.S. dollar dropped to three-month lows against its Canadian counterpart on Friday, as a string of disappointing U.S. economic reports continued to weigh on the greenback and positive data from Canada lent support to the local currency.
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.
Year-on-year, U.S. consumer prices fell 0.1% 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.
The report came after a string 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.
Meanwhile, Statistics Canada reported 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.
Data 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 loonie was higher against the euro, with EUR/CAD retreating 0.51% to 1.3047.
Later in the day, the U.S. was to release data on consumer prices and consumer sentiment.