Investing.com - The U.S. dollar rose to two-month highs against its Canadian counterpart on Thursday, after data showed that the U.S. employment cost index rose at the fastest rate since September 2008 in the second quarter.
USD/CAD hit 1.0930 during European afternoon trade, the pair's highest since June 9; the pair subsequently consolidated at 1.0920, adding 0.17%.
The pair was likely to find support at 1.0850, Wednesday's low and resistance at 1.0960, the high of June 5.
The dollar added to gains after the Labor Department reported that the employment cost index rose by 0.7% in the three months to June after a 0.3% increase in the first quarter. Economists had expected a 0.5% gain.
Wages rose by 0.6% in the second quarter the report said.
At the same time, the Labor Department said the number of people who filed for unemployment assistance in the U.S. last week rose by 23,000 to 302,000 from the previous week’s total of 279,000. Analysts had expected jobless claims to rise by 22,000 to 301,000.
The reports came one day after official data showed that the U.S. economy rebounded more strongly than expected in the second quarter, fuelling speculation over the timing of a possible U.S. rate hike.
Investors were awaiting the U.S. nonfarm payrolls report for July on Friday, after the Federal Reserve said Wednesday that considerable slack still remains in the labor market despite recent improvements in jobs growth.
The Canadian dollar shrugged off data showing that the country's gross domestic product grew 0.4% in May, ahead of forecasts of 0.3% growth.
On a year-over-year basis the Canadian economy expanded 2.3%, in line with forecasts.
The loonie was little changed against the euro, with EUR/CAD dipping 0.01% to 1.4607.
Later in the day, the U.S. was to release data on manufacturing activity in the Chicago area.