The U.S. dollar fell against its Canadian counterpart on Wednesday, weighed by the release of downbeat U.S. housing sector data, while higher oil prices lent support to the commodity-related Canadian currency.
The greenback weakened after the U.S. Commerce Department reported on Wednesday that the number of housing starts and building permits both fell in July.
The weak report offset optimism sparked on Tuesday by data showing that U.S. retail sales rose at a faster than expected rate last month.
Market participants were looking ahead to the Federal Reserve’s most recent policy meeting for indications on another potential rate hike this year.
Meanwhile, the Canadian dollar benefited from a rise in oil prices on Wednesday, ahead of weekly supply data.
Markets seemed to shrug off a separate report showing that Canada’s foreign securities purchases fell by C$923 million in June, compared to expectations for an increase of C$23.45 billion.
Sentiment on the euro remained vulnerable however, following reports European Central Bank President Mario Draghi will not deliver any fresh monetary policy message at the U.S. Federal Reserve’s Jackson Hole conference.
The report tempered expectations that the ECB is moving closer to announcing plans to scale back its monetary stimulus program.