Investing.com - The U.S. dollar edged lower against its Canadian counterpart on Wednesday, pulling away from three-month highs as upbeat Canadian trade data lent support the loonie, although a similarly positive U.S. trade report still supported the greenback.
USD/CAD hit 1.0941 during early U.S. trade, the session low; the pair subsequently consolidated at 1.0946, slipping 0.13%.
The pair was likely to find support at 1.0885, the low of August 1 and resistance at 1.1026, the high of April 29.
The Canadian dollar gained some ground after official data showed that the country's trade surplus unexpectedly widened to C$1.86 billion in June from C$580 million in May. Canadian exports grew 1.1% to a record high C$45.2 billion and imports decreased 1.8% to C$43.3 billion.
In the U.S., official data showed that the trade deficit narrowed unexpectedly to $41.54 billion in June from a deficit of $44.66 billion a month earlier. It was the smallest deficit in five months as exports inched up 0.1% and imports fell 1.2%.
The greenback had recently found broad support after data on Tuesday showed that the U.S. service sector expanded at the fastest pace in more than three years in July, while U.S. factory orders rose 1.1% in June, above economists' forecasts of a 0.5% gain.
The loonie was higher against the euro, with EUR/CAD retreating 0.30% to 1.4618.
In the euro zone, official data on Wednesday showed that German factory orders dropped 3.2% in June, disappointing expectations for a 1.0% increase. May's figure was revised to a 1.6% fall from a previously estimated 1.7% drop.
Sentiment on the single currency remained vulnerable ahead of the conclusion of the European Central Bank’s monthly monetary policy review on Thursday, amid concerns over the diverging monetary policy stance between the central bank and its major peers.