Investing.com - The U.S. dollar fell to nearly three-month lows against its Canadian counterpart on Tuesday, as rising oil prices and the release of strong Canadian economic growth data lent support to the local currency.
USD/CAD hit 1.3456 during early U.S. trade, the pair’s lowest since December 7; the pair subsequently consolidated at 1.3475, declining 0.52%.
The pair was likely to find support at 1.3361, the low of December 7 and resistance at 1.3736, the high of February 25.
Statistics Canada said gross domestic product expanded 0.2% in December from a month earlier, slightly higher than forecasts for growth of 0.1%. Canada’s economy grew 0.3% in November.
Meanwhile, crude oil prices remained above $34 a barrel on Tuesday as investors continued to hope for a production cut by major oil producers.
The loonie was higher against the euro, with EUR/CAD retreating 0.60% to 1.4638.
Earlier Tuesday, Eurostat said that the euro zone’s unemployment rate fell to 10.3% from 10.4% in December. This is the lowest rate recorded in the euro area since August 2011. Analysts had expected the jobless rate to hold steady at 10.4% in January.
But sentiment on the single currency remained vulnerable after data on Monday showed that the euro area fell back into deflation in February, cementing expectations for more easing by the European Central Bank at its upcoming meeting on March 10.