Investing.com - The U.S. dollar rose to six month highs against the Canadian dollar on Tuesday after data showed that Canada’s economy failed to grow in July, following six consecutive monthly gains.
USD/CAD hit highs of 1.1203, the most since March 25, and was last up 0.27% to 1.1191 from 1.1158 before the report.
The pair was likely to find support at around 1.1140 and resistance at about 1.1220.
Statistics Canada reported that gross domestic product was flat in July, after a 0.3% increase in June. Economists had forecast growth of 0.2%.
Canada’s economy grew at an annualized rate of 2.5% in July, falling short of expectations for annual growth of 2.8%, following growth of 3.1% in the preceding month.
A separate report showed that Canada’s raw materials price index declined 2.2% in August, largely as a result of lower prices for crude energy products.
The industrial product price index rose 0.2% last month, mainly because of higher prices for motor vehicles.
Demand for the dollar continued to be underpinned by expectations that the Federal Reserve is moving closer to hiking interest rates.
The greenback was also boosted by strong gains against the euro, which fell to a two-year trough on Tuesday after data showed that the annual rate of inflation in the single currency bloc fell to a five year low of 0.3% in September.
The weak data added to pressure on the European Central Bank to implement additional monetary stimulus measures.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was last up 0.54% to 86.21, after rising to peaks of 86.34 earlier, a high last seen in June 2010.
Elsewhere, EUR/CAD was down 0.44% to 1.4098.