USD/CAD climbed to six-week highs on downbeat Canadian CPI

US dollar advanced to its highest level in six weeks against the Canadian counterpart on Friday, following the release of Canadian CPI report and amid expectations of a possible near-term stimulus scale back by the Federal Reserve.

USD/CAD reached a session high at 1.0566 at 9:50 GMT, also the pairs highest point since July 9th, after which consolidation followed at 1.0550, still up by 0.30% for the day. Support was expected at August 22nd low, 1.0472, while resistance was to be encountered at July 8th high, 1.0586.

Today Statistics Canada reported that the annual consumer price inflation in the country rose in July at a slower rate than projected, as higher gasoline prices were neutralized by the slowest pace of increase of food prices for the past three years. The consumer price index (CPI) in Canada rose by 1.3% in July on annual basis, after the 1.2% rise in June. Experts had anticipated that the index will advance by 1.4%. Core consumer price index, which excludes volatile components such as food and energy costs, rose by 1.4% in July annually, also below the projected 1.5% increase, after it increased by 1.3% in June.

In the mean time, the US dollar found support after on Wednesday the released minutes of Federal Reserve’s most recent meeting showed that policymakers were “broadly comfortable” with Chairman Ben Bernanke’s time frame to begin asset purchase tapering this year, if the economy improves, with a few officials saying a reduction might be necessary soon.

Also, yesterday the Department of Labor in the United States reported that initial jobless claims rose by 13 000 to 336 000 during the week ending on August 17th 2013, as experts had anticipated a lesser increase in the number of claims, to 330 000.

Elsewhere, the loonie, as Canadian dollar is also known, was trading on negative territory against the euro, as EUR/CAD cross rose by 0.37% to 1.4100 at 14:23 GMT. GBP/CAD pair was also gaining, up by 0.12% for the day to trade at 1.6416 at 14:25 GMT.