Investing.com - The U.S. dollar dropped to two-week lows against its Canadian counterpart on Tuesday, as sentiment on the greenaback remained vulnerable following reported remarks by U.S. President Barack Obama although recent U.S. jobs data still lent some support.
USD/CAD hit 1.2331 during early U.S. trade, the pair's lowest since May 26; the pair subsequently consolidated at 1.2342, retreating 0.55%.
The pair was likely to find support at 1.2448, the low of May 26 and resistance at 1.2470, Monday's high.
Sentiment on the greenback remained vulnerable following rumors on Monday that President Obama told the G7 summit in Germany that the strong dollar was "a problem."
The dollar had strengthened broadly after a strong U.S. jobs report on Friday bolstered expectations that the Federal Reserve will hike interest rates later this year.
The Canadian dollar had strengthened on Monday after data showed that the country's building permits increased by 11.6% in April, beating expectations for a 3.4% gain.
Another report also showed that Canada's housing starts rose by 201,700 units in May, compared to expectations for an increase of 185,000.
The loonie was sharply higher against the euro, with EUR/CAD tumbling 0.95% to 1.3877.
The single currency weakened as investors also remained cautious after German Chancellor Angela Merkel warned Monday that "there isn’t much time left" to reach an agreement on a cash-for-reforms deal needed to unlock more financial aid before Greece runs out of money.
Athens delayed a key debt payment to the International Monetary Fund on Friday, saying it would repay the money along with other payments due this month by the end of June.
Athens submitted new proposals for economic reforms to the European Commission on Tuesday, fuelling hopes for a breakthrough that could unlock new funding before the country runs out of money.
Greek Prime Minister Alexis Tsipras said the two sides could reach a deal if Greece’s creditors dropped demands to cut pensions and other proposals which would push Greece deeper into recession.
Also Tuesday, data confirmed that the euro area economy grew 0.4% in the first three months of the year. But the Greek economy contracted 0.2% in the quarter, sending the country back into a recession.