Investing.com - The U.S. dollar pared back gains against the Canadian dollar on Tuesday after data showing that U.S. retail sales fell unexpectedly last month, tempering expectations for higher interest rates.
USD/CAD was last at 1.2755, off earlier highs of 1.2805.
The greenback turned lower after the Commerce Department said retail sales fell 0.3% in June, compared to expectations for a 0.2% increase.
May’s retail sales were revised down to 1.0% from 1.2% previously.
The dollar had edged lower earlier in the session amid concerns that testimony by Federal Reserve Chair Janet Yellen to Congress on Wednesday could push back expectations on the timing of an initial rate hike.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.34% to 96.60.
Investors also remained cautious ahead of the Bank of Canada’s monetary policy meeting on Wednesday.
Investors have scaled back expectations for a rate cut after the latest Canadian jobs report came in stronger than expected.
Official data last Friday showed that Canada’s economy shed 6,400 jobs in June, fewer than the 10,000 loss forecast by economists.
Elsewhere, the loonie, as the Canadian dollar is also known, was lower against the euro, with EUR/CAD advancing 0.57% to 1.4089.
The euro remained on the defensive as investors waited to see if the Greek parliament would support harsh austerity measures demanded by the country’s creditors in exchange for a deal to avoid financial collapse.
Greek Prime Minister Alexis Tsipras was to meet with MP's on Tuesday, but faced an uphill battle to win support for a third bailout deal offered by the country’s creditors.
Four pieces of legislation must be passed by the end of the day on Wednesday, including pension and sales tax reforms.