Investing.com - The U.S. dollar fell to session lows against the Canadian dollar on Wednesday after data showed that service sector activity in the U.S. grew at the slowest pace since August 2010 in February, and the Bank of Canada left rates on hold.
USD/CAD hit 1.1035, the lowest since February 19 and was last down 0.41% to 1046.
The pair was likely to find support at 1.1025 and resistance at 1.1098, the session high.
The U.S. dollar weakened after the Institute of Supply Management said its services purchasing manager's index fell to a 43-month low of 51.6 last month from 54.0 in January. Analysts had expected the index to tick down to 53.5 in February.
The employment index fell sharply in February, contracting for the first time after 25 consecutive months of growth.
The report came after ADP nonfarm payrolls data showed that the U.S. private sector added 139,000 jobs in February, well below expectations for an increase of 160,000. January's figure was revised sharply down to 127,000 from the previously reported 175,000.
Meanwhile, the Bank of Canada left rates on hold at 1.00% on Wednesday, in a widely anticipated decision.
The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.
However, the bank also said inflation is expected to remain well below target for some time and the direction of the next change to the policy rate will be data dependent.
Elsewhere, the loonie, as the Canadian dollar is also known, was higher against the euro, with EUR/CAD falling 0.53% to 1.5162.
The euro remained under pressure ahead of the European Central Bank’s monthly policy meeting on Thursday amid concerns that the bank could tighten monetary policy, to stave off the risk of deflation in the region.
The shared currency shrugged off data on Wednesday showing that euro zone private sector activity grew more rapidly than initially estimated in February, expanding at the fastest pace since June 2011.
A separate report showed that euro zone retail sales rose more strongly than forecast in January.