Investing.com - The U.S. dollar fell to two-week lows against its Canadian counterpart on Friday, as higher than expected inflation data from Canada boosted demand for the loonie, although demand for the greenback remained broadly supported.
USD/CAD hit 1.0911 during European afternoon trade, the pair's lowest since September 8; the pair subsequently consolidated at 1.0913, slipping 0.21%.
The pair was likely to find support at 1.0877, the low of September 8 and resistance at 1.1023, Thursday's high.
In a report, Statistics Canada said that core consumer price inflation rose 0.5% last month, more than the expected 0.2% gain, after a 0.1% fall in July.
Consumer price inflation including the eight most volatile items was flat in August, compared to expectations for a 0.1% downtick, after a 0.2% slip the previous month.
A separate report showed that wholesale sales in Canada declined 0.3% in July, disappointing expectations for an increase of 0.8%. The change in wholesale sales for June was revised to a 0.8% gain from a previously estimated 0.6% rise.
But the greenback's losses were expected to remain limited as the Federal Reserve on Wednesday cut its monthly bond-buying program by another $10 billion following its two-day policy meeting on Wednesday, keeping the program on track to finish next month.
Markets interpreted the Fed's statement as hawkish, despite policymakers maintaining language suggesting that rate hikes would not happen for a "considerable time."
The loonie was also higher against the euro, with EUR/CAD retreating 0.72% to 1.4031.