Investing.com - The U.S. dollar fell to one-week lows against the Canadian dollar on Friday after official data showed that the annual rate of inflation in Canada rose at the fastest pace since February 2012 in June.
USD/CAD touched lows of 1.0709, the weakest since July 11 and was last down 0.23% to 1.0734.
The pair was likely to find support at around the 1.0700 level and resistance at 1.0775.
The Canadian dollar strengthened after Statistics Canada reported that the annual rate of inflation rose to 2.4% last month, up from 2.3% in May. Market expectations had been for an unchanged reading.
Core inflation, which excludes some food and energy costs, rose to 1.8% from 1.7%.
On a monthly basis, inflation slowed to 0.1% from 0.5% in May, while core inflation declined to 0.1% after a 0.5% gain in May.
A separate report that showed that wholesale sales rose by a larger-than-forecast 2.2% in May.
Earlier in the week, the Bank of Canada said the recent increase in inflation was due to temporary factors, such as the high cost of energy, rather than any change in economic fundamentals.
The bank left rates on hold at 1.0% in a widely anticipated decision on Wednesday and said the future path of monetary policy would be data dependent.
In the wider markets, investors remained cautious following the shooting down of a Malaysia Airlines jet in eastern Ukraine on Thursday. Moscow has denied involvement in the crash, which came a day after the U.S. announced a fresh round of sanctions against Russia for supporting separatists in east Ukraine.
Markets were also unsettled as Israel expanded its ground offensive in Gaza.
In the week ahead, the U.S. is to release what will be closely watched data on consumer prices, home sales and manufacturing orders, while Canada is to release data on retail sales.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, July 22
The U.S. is to release reports on consumer price inflation and existing home sales.
Wednesday, July 23
Canada is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Thursday, July 24
The U.S. is to produce data on unemployment claims, manufacturing activity and new home sales.
Friday, July 25
The U.S. is to round up the week with data on durable goods orders.