Investing.com - The U.S. dollar rose to more than five-year highs against its Canadian counterpart on Tuesday, as weak Canadian manufacturing sales data dampened demand for the nation's currency.
USD/CAD hit 1.2035 during early U.S. trade, the pair's highest since January 16; the pair subsequently consolidated at 1.2042, climbing 0.85%.
The pair was likely to find support at 1.1930, Monday's low and resistance at 1.2046, the high of January 16 and a more than five-year peak.
In a report, Statistics Canada said that manufacturing sales dropped 1.4% in November, confounding expectations for a 0.5% slip. October's figure was revised to a 1.1% decline from a previously estimated 0.6% fall.
The loonie was also lower against the euro, with EUR/CAD gaining 0.66% to 1.3950.
Also Tuesday, data showed that the closely watched ZEW index of German economic sentiment rose to an 11-month high of 48.4 in January from 34.9 in December, ahead of forecasts of 40.0.
The report boosted hopes that Germany’s economy, the euro zone’s largest would rebound in 2015 after weakening at the end of last year.
The ZEW survey of euro zone economic sentiment increased to a six-month high of 45.2 from 31.8 in December, beating forecasts of 37.6.
Sentiment on the single currency remained vulnerable however, as investors waited to see if the European Central Bank would embark on an outright quantitative easing program at its upcoming meeting on Thursday.
Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls also weighed.