Investing.com - The U.S. dollar rose to three-week highs against its Canadian counterpart on Friday, after the release of disappointing inflation data from Canada and as optimism over the health of the U.S. economy continued to support the greenback.
USD/CAD hit 1.3192 during early U.S. trade, the pair's highest since October 2; the pair subsequently consolidated at 1.3179, climbing 0.66%.
The pair was likely to find support at 1.2930, the low of October 20 and resistance at 1.3176, the high of October 5.
Statistics Canada said its consumer price index fell 0.2% in September, compared to expectations for a 0.1% downtick, after a flat reading the previous month. Year-on-year, consumer prices rose 1.0% last month, disappointing expectations for a 1.1% increase.
Core CPI, which excludes the eight most volatile items, ticked up 0.2% last month, compared to expectations for a 0.3% gain, after a 0.2% uptick in August.
Meanwhile, the greenback remained supported after the U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending October 17 increased by 3,000 to 259,000 from the previous week’s total of 256,000.
Analysts had expected jobless claims to rise by 9,000 to 265,000.
In addition, the U.S. National Association of Realtors said that existing home sales increased by 4.7% to 5.55 million units last month from 5.30 million in August. Analysts had expected existing home sales to rise 1.4% to 5.38 million units in September.
The U.S. dollar was also boosted after European Central Bank President Mario Draghi said the central bank will "reexamine" its monetary policy in December, hinting at the possibility for further easing measures.
Speaking at the ECB's monthly press conference, Mr. Draghi added that the ECB's quantitative easing program is set to run until 2016 or beyond if necessary.
The loonie was lower against the euro, with EUR/CAD adding 0.14% to 1.4564.
Earlier Friday, research group Markit said that Germany's preliminary manufacturing purchasing managers' index ticked down to 51.6 this month from 52.3 in September, while the services PMI rose to 55.2 from 54.1.
In France, the preliminary manufacturing PMI came in at 50.7 in October, Market reported, up from 50.6 the previous month, while the services PMI ticked up to 52.3 from 51.9.
For the entire euro zone, Markit said the composite PMI, which includes both manufacturing and service sector activity, rose to 54.0 in October from 53.6 the previous month.