Investing.com - The U.S. dollar rose to four-week highs against its Canadian counterpart on Tuesday, after data showed that U.S. building permits and housing starts blew past expectations last month and as markets eyed the Federal Reserve's upcoming policy statement.
USD/CAD hit 1.2206 during early U.S. trade, the pair's highest since April 23; the pair subsequently consolidated at 1.2239, gaining 0.65%.
The pair was likely to find support at 1.2028, the low of May 7 and resistance at 1.2307, the high og April 21.
The dollar strengthened broadly after the U.S. Commerce Department said that the number of building permits issued last month increased by 10.1% last month to 1.143 million units from March's total of 1.038 million.
Analysts expected building permits to rise by 2.2% to 1.060 million units in March.
The report also showed that U.S. housing starts soared by 20.2% in April to hit 1.135 million units from March's total of 944,000 units, easily surpassing expectations for an increase of 9.9% to 1.019 million.
The loonie was higher against the euro, with EUR/CAD retreating 0.89% to 1.3636.
The single currency was hit after senior European Central Bank policymaker Benoit Coeure said the central bank is planning to speed up the pace of its bond-buying stimulus program before the summer in order to avoid the "notably lower market liquidity" in late July and August.
Also Tuesday, the ZEW Centre for Economic Research said that its index of German economic sentiment fell to 41.9, the lowest level since December, from April's 53.3. Economists had expected a reading of 49.0.
Fears over the prospects of a Greek default also continued to weigh, even after the country’s labor minister said Tuesday that an agreement with its lenders on a cash-for-reforms deal would soon be reached.