Investing.com - The U.S. dollar dropped to one-month lows against its Canadian counterpart on Tuesday, after U.S. and Canadian trade data came out below market expectations, while strong euro zone reports boosted risk appetite.
USD/CAD hit 1.0961 during European afternoon trade, the pair's lowest since April 10; the pair subsequently consolidated at 1.0903, retreating 0.47%.
The pair was likely to find support at 1.0868, the low of April 10 and resistance at 1.0989, Monday's high.
Official data showed that the U.S. trade deficit narrowed to $40.38 billion in March, from $41.87 billion in February, whose figure was revised from a previously estimated deficit of $42.30 billion. Analysts had expected the trade deficit to narrow to $40.30 billion in March.
In Canada, data showed that the trade surplus narrowed to C$0.08 billion in March, from C$0.85 billion in February, whose figure was revised up from a previously estimated surplus of C$0.29 billion. Analysts had expected the trade surplus to narrow to C$0.40 billion in March.
The loonie was steady against the euro, with EUR/CAD easing 0.01% to 1.5199.
The single currency strengthened broadly after data showed that euro zone retail sales rose 0.3% in March, confounding expectations for a 0.2% fall. Retail sales in February were revised down to a 0.1% gain from a previously estimated 0.4% increase.
The report came after official data showed that the number of unemployed people in Spain dropped by 111,600 in April, compared to expectationd for a decline of 49,100, after a 16,600 fall the previous month.
Separately, Markit research group said that Spain's services purchasing managers' index rose to a six-year high of 56.5 last month, from a reading of 54.0 in March. Analysts had expected the index to tick up to 54.4 in April.
Italy's services PMI swung back into expansion territory last month, rising to 51.1 from a reading of 49.5 in March, beating expectations for an uptick to 50.4.