The U.S. dollar rose to one-and-a-half month highs against its Canadian counterpart on Tuesday, as demand for the greenback grew strong ahead of an upcoming report by the Institute of Supply Management on U.S. service sector activity.

USD/CAD hit 1.0952 during early U.S. trade, the pair's highest since June 5; the pair subsequently consolidated at 1.0944, rising 0.34%.

The pair was likely to find support at 1.0885, the low of August 1 and resistance at 1.0989, the high of May 5.

The dollar regained some support after slipping in the wake of Friday’s U.S. employment report, which showed that jobs growth slowed slightly in July prompting investors to curtail expectations on the timing of a possible rate hike by the Federal Reserve.

The U.S. economy added 209,000 jobs in July, below forecasts for 233,000, while the unemployment rate ticked higher and wage growth was flat, pointing to underlying slack in the economy.

The loonie was steady against the euro, with EUR/CAD inching up 0.05% to 1.4647.

The single currency came under pressure after the release of a series of lackluster service sector activity reports from across the currency bloc.

Service sector activity in Italy grew at a slower pace than expected in July. Service sector activity in German and Spain grew last month, while the expansion in the French service sector remained marginal.

The euro zone’s services PMI came in at 54.2, up from 52.2 in June, but slowing slightly from a preliminary reading of 54.4.

The data added to the view that the recovery in the euro zone is losing momentum as investors looked ahead to the outcome of the European Central Bank’s monetary policy meeting on Thursday.

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