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Forex - USD/CAD trims gains after Canadian data, remains supported

Published 11/20/2015, 09:24 AM
Greenback pulls back from session highs vs. loonie on mixed Canadian data
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Investing.com - The U.S. dollar trimmed gains against its Canadian counterpart on Friday, after the release of mixed Canadian data, but remained supported near one-and-a-half month highs as investors continued to bet on a potential U.S. rate hike in December.

USD/CAD pulled away from 1.3334 the pair's highest since Wednesday, to hit 1.3294 during early U.S. trade, still up 0.08%.

The pair was likely to find support at 1.3221, the low of November 12 and resistance at 1.3351, the high of November 13 and a one-and-a-half month peak.

The greenback remained supported after the minutes of the Federal Reserve's October meeting showed on Wednesday that a majority of board members are in favor of a December rate hike.

"While no decision had been made, it may well become appropriate to initiate the normalization process at the next meeting," the minutes said.

Elsewhere, Statistics Canada reported on Friday that retail sales fell 0.5% in September, disappointing expectations for a 0.2% rise, after a 0.5% gain the previous month.

Core retail sales, which exclude automobiles, also declined by 0.5% in September, compared to expectations for a 0.2% fall, after a flat reading in August.

A separate report showed that Canada's consumer price inflation ticked up 0.1% in October, in line with expectations and after an increase of 0.2% the previous month.

Core CPI, which excludes the eight most volatile items, rose by 0.3% last month, beating expectations for a 0.2% gain, after a 0.2% uptick in September.

The loonie was higher against the euro, with EUR/CAD shedding 0.21% to 1.4231.

The euro weakened after European Central Bank President Mario Draghi reiterated that the central bank will do what is necessary to ensure that inflation returns rapidly toward the goal of just under 2%.

The comments came a day after the minutes of the ECB’s October meeting showed on Thursday that the risk that it would miss its inflation target again has increased.

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