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Forex - USD/CAD edges higher after Canadian inflation data disappoints

Investing.com -

Investing.com - The U.S. dollar edged higher against its Canadian counterpart on Friday, after the release of disappointing Canadian inflation data, although the greenback's gains were expected to remain limited.

USD/CAD hit 1.3498 during early U.S. trade, the session high; the pair subsequently consolidated at 1.3492, adding 0.17%.

The pair was likely to find support at 1.3372, Wednesday's low and resistance at 1.3496, the high of March 14.

Statistics Canada said the consumer price index increased by 0.2% in March, compared to forecasts for a 0.4% gain and after a 0.2% rise the previous month.

Year-on-year, consumer prices rose 1.6% last month, below expectations for a 1.8% increase.

Core CPI, which excludes food and energy, rose by 0.3% in March, after a gain of 0.4% in February.

But the commodity-related Canadian dollar found some support in higher oil prices on Friday, amid growing hopes OPEC members will extend their production-cut deal into the second half of the year.

On the other hand, the greenback mildly recovered from recent losses after U.S. Treasury Secretary Steven Mnuchin said on Thursday that the administration will unveil a tax reform plan very soon.

The comments eased doubts over whether President Donald Trump will be able to pass tax reforms in the near term.

Meanwhile, investors remained cautious after a French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack claimed by the Islamic State.

Market participants were also eyeing the first round of the French presidential election due on Sunday, as recent polls have forecast the most likely outcome to be centrist Emmanuel Macron against far-right candidate Marine Le Pen.

The loonie was steady against the euro, with EUR/CAD at 1.4444.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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