Investing.com - The Canadian dollar fell to two-week lows against its U.S. counterpart on Tuesday as the greenback strengthened and lower prices for oil, a major Canadian export, weighed.
USD/CAD hit highs of 1.3213, the most since January 24 and was last at 1.3168, up 0.69% for the day.
The dollar strengthened across the board after Philly Fed President Patrick Harker said on Monday he would support hiking rates in March.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.66% to 100.50.
Meanwhile, data on Tuesday showed that the U.S. trade deficit narrowed in December, to $44.3 billion, on the back of an increase in exports.
The report also showed that the U.S. trade deficit hit a four-year high in 2016, at $502.3 billion, up from $500.4 billion in 2015.
The data was likely to bolster President Donald Trump’s claims that the U.S. needs to take a tougher approach on trade.
In Canada, official data showed that the country posted a C$923 million trade surplus in December, as crude oil exports jumped.
November's surplus was revised sharply higher, but while overall exports rose by 0.8% in December, export volumes actually fell by 1.4%.
Another report showed that the value of Canadian building permits in December fell by 6.6% from November.
It was the largest decline in almost a year, amid weakness in both the residential and non-residential sectors the report said.
Lower prices for oil, a major Canadian export, also weighed on the Canadian dollar.
Oil prices fell, weighed down by a combination of the stronger greenback and concerns that increasing U.S. production could derail efforts by other major producers to reduce a global supply glut.