Investing.com - The U.S. dollar dropped against its Canadian counterpart on Tuesday, after data showed that Canada's economy expanded more-than-expected in December.
USD/CAD hit 1.2435 during early U.S. trade, the pair's lowest since February 26; the pair subsequently consolidated at 1.2463, declining 0.60%.
The pair was likely to find support at 1.2359, the low of February 17 and resistance at 1.2625, the high of February 23.
Official data earlier showed that Canada's gross domestic product expanded by 0.3% in December, exceeding expectations for a growth rate of 0.1% and following a 0.2% contraction the previous month.
Year-on-year, Canada's GDP rose 2.4% in the fourth quarter of 2014, compared to expectations for 2.2%. The third quarter's figure was revised to a an expansion rate of 3.2% from a previously estimated 2.8%.
The greenback had rallied broadly on Monday after data showed that U.S. manufacturing activity continued to expand in February supported expectations for higher interest rates.
The loonie was higher against the euro, with EUR/CAD retreating 0.61% to 1.3936.
In the euro zone, Spain’s Employment Ministry reported that the number of unemployed people declined by 13,500 last month, compared to expectations for an increase of 10,500. The number of unemployed people rose by 78,000 in January.
Data also showed that German retail sales jumped 2.9% in January, easily outstripping forecasts for a 0.4% increase.
But sentiment on the euro remained fragile ahead of the upcoming European Central Bank meeting on Thursday, when it was expected to announce details of its quantitative easing program.