Investing.com - The U.S. dollar drifted lower against the Canadian dollar on Monday in thin trade, as markets in both the U.S. and Canada remained closed for the Labor Day holiday.
USD/CAD slid 0.15% to 1.0860 from 1.0875 late Friday.
The pair was likely to find support at around 1.0825 and resistance at 1.0880.
The Canadian dollar rose to one-month highs against the U.S. dollar on Friday after official data showed that Canada’s economy grew at a faster-than-expected rate in the second quarter.
Statistics Canada reported that the economy expanded by an annualized 3.1% in the three months to June, ahead of expectations for 2.7%. Faster economic growth was attributed to a 17.8% increase in exports, while household spending jumped 3.8%.
On a quarter-over-quarter basis, the Canadian economy expanded 0.8%, following a 0.2% increase in the first quarter. It was the largest quarterly gain since the third quarter of 2011.
But the loonie, as the Canadian dollar is also known, backed off one-month highs as broadly upbeat U.S. data indicated that the economic recovery is on track.
On Thursday, revised data showed that U.S. gross domestic product expanded at an annual rate of 4.2% in the second quarter, up from a preliminary estimate of 4% and rebounding from a first quarter contraction.
Data on Friday showed that U.S. consumer sentiment rebounded to a seven year high in August, while another report showed that manufacturing activity in the Chicago region continued to expand in August.
This offset a separate report showing that U.S. consumer spending unexpectedly fell 0.1% in July.
Elsewhere, the loonie was close to 21-month highs against the broadly weaker euro, with EUR/CAD at 1.4266.
The single currency was pressured lower amid amid mounting expectations for quantitative easing by the European Central Bank as a way to shore up long term inflation expectations.
Concerns that sanctions against Russia would also act as a drag on growth in the euro zone also continued to weigh on the shared currency following weak data on German second quarter growth and soft euro zone factory data earlier Monday.
