Investing.com - The U.S. dollar fell to fresh two-month lows against its Canadian counterpart on Wednesday, after downbeat U.S. retail sales data and as sentiment on the greenback became more fragile ahead of the Federal Reserve’s policy decision due later in the day.
USD/CAD hit 1.3093 during early U.S. trade, the pair’s lowest since October 19; the pair subsequently consolidated at 1.3112, shedding 0.14%.
The pair was likely to find support at 1.3001, the low of October 19 and resistance at 1.3164, Monday’s high.
The U.S. Commerce Department said retail sales ticked up 0.1% in November, disappointing expectations for a 0.3% gain.
Core retail sales, which exclude automobiles, gained 0.2% last month, compared to expectations for an increase of 0.4%.
A separate report showed that the U.S. producer price index rose 0.4% in November, beating expectations for a 0.1% uptick.
Later Wednesday, the Fed is widely expected to hike rates for the first time in a year on at the conclusion of its policy meeting.
The U.S. central bank will also announce updated economic forecasts and markets will be watching closely for signals on the outlook for inflation and the expected pace of rate hikes in 2017.
Investors remained wary amid concerns that the Fed could strike a cautious tone on the outlook for policy tightening next year.
Higher rates boost the dollar by making the currency more attractive to yield-seeking investors.
The loonie was steady against the euro, with EUR/CAD at 1.3953.