Investing.com - The U.S. dollar pulled back from four-and-a-half year highs against the Canadian dollar on Thursday as a sharper-than-expected increase in Canadian retail sales prompted investors to take profits.
USD/CAD retreated from 1.1174, the highest since July 2009, to trade at 1.1105, just 0.18% higher for the day.
The pair was likely to find support at 1.1050 and resistance at 1.1174, the session high.
The Canadian dollar found support after official data showed that retail sales rose 0.6% in November, surpassing expectations for a 0.3% increased, recovering from a 0.1% decline in October.
Statistics Canada said core retail sales, which exclude auto sales, rose 0.4% in November, slightly higher than forecasts for a 0.3% gain, but slowing from growth of 0.5% in October.
The loonie, as the Canadian dollar is also known, remained under pressure after the Bank of Canada expressed concern over the inflation outlook on Wednesday, and left the way open for a rate cut, saying the path of the next rate move would depend on economic data.
In the U.S., data on Thursday showed that initial jobless claims rose in line with expectations last week, but the number of continuing jobless claims remained above the three million mark for the second successive week.
The number of people who filed for unemployment assistance in the U.S. last week rose to 326,000, the Labor Department said, up from the previous week’s revised total of 325,000.
However, the number of people filing continuing unemployment claims rose to 3.056 million up from 3.022 million in the week to January 11. Analysts had expected continuing claims to fall to 2.930 million.
Elsewhere, the loonie was trading at four-year lows against the stronger euro, with EUR/CAD advancing 1.07% to 1.5178.
The common currency was boosted after stronger-than-expected data on euro zone private sector activity indicated that the recovery in the euro area is strengthening.
Markit said the euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December, as growth picked up in Germany and the rate of decline eased in France.