Investing.com - The U.S. dollar rose to session highs against the Canadian dollar on Monday, rebounding from six-month lows after data showed that the Canadian economy grew less than expected in April.
USD/CAD was up 0.29% to 1.0692 from around 1.0677 ahead of the data.
The pair was likely to find support at 1.0658, Friday’s low and the weakest since January 7 and resistance at 1.0725.
The loonie, as the Canadian dollar is also known, turned lower after Statistics Canada reported that gross domestic product expanded by just 0.1% in April, below forecasts for a 0.2% increase. Canada’s economy grew by 0.1% in March.
On a year-over-year basis, the Canadian economy expanded 2.1% in April, slightly below expectations for a reading of 2.3% and unchanged from the previous month.
The Canadian dollar has rallied in recent sessions, gaining momentum after stronger-than-expected inflation data earlier this month raised expectations that the Bank of Canada could shift away from its neutral stance on monetary policy.
The greenback’s gains were held in check after data last week showing a sharper-than-expected 2.9% contraction in the U.S. economy in the first quarter underlined the view that the Federal Reserve will keep rates on hold for an extended period.
Investors were turning their attention to the U.S. nonfarm payrolls report, due to be released one day early on Thursday, for further indications on the strength of the labor market.
Elsewhere, the loonie was down against the euro, with EUR/CAD rising 0.24% to 1.4595.
Earlier Monday, preliminary data showed that the annual rate of inflation in the euro zone remained unchanged at 0.5% in June, easing pressure on the European Central Bank to announce fresh monetary easing measures.