Investing.com - The U.S. dollar rose to four-day highs against the Canadian dollar on Wednesday after data showing that Canadian wholesales sales fell more than expected in December reawakened concerns over the subdued economic outlook.
USD/CAD hit 1.1019, the highest since February 13 and was last up 0.57% to 1.1009.
The pair was likely to find support at 1.0909, the session low and resistance at 1.1035.
The Canadian dollar fell to session lows after official data showed that domestic wholesale sales fell 1.9% in December, far more than expectations for a 0.5% decline.
The data supported the Bank of Canada’s dovish stance on the outlook for inflation and economic growth.
The pair had been moving lower this month, retracing some January’s strong rally, which carried the USD/CAD pair to four-and-a-half year highs.
In the U.S., data on Wednesday showed that the number of building permits issued last month declined by 5.4% to a seasonally adjusted 937,000 units from December’s total of 991,000.
Analysts expected building permits to fall by 1.8% to 980,000 units in January.
U.S. housing starts plunged by 16% in January to hit a seasonally adjusted 880,000 units from December’s total of 1.048 million, disappointing expectations for a 5.7% drop to 950,000 units.
A separate report showed that producer prices rose 0.2% last month, above forecasts for a 0.1% gain, after rising 0.1% in December.
The core producer price index eased up 0.2% last month, above expectations for a 0.1% increase.
Investors were looking ahead to the minutes of the Federal Reserve’s January meeting later Wednesday, when the bank voted to cut its stimulus program by another $10 billion to $65 billion per month.
Earlier this month Fed Chair Janet Yellen indicated that the central bank is on track to maintain the pace of reductions to its stimulus program, as long as the economy continues to improve as expected.
Elsewhere, the loonie, as the Canadian dollar is also known, was weaker against the euro, with EUR/CAD rising 0.56% to 1.5146.