The Canadian dollar extended early decline against the Japanese yen and the U.S. dollar in European deals on Tuesday, after data showed that Canada’s trade deficit widened in May.
Data from Statistics Canada showed that Canada’s merchandise trade deficit widened to C$3.3 billion in May from a revised C$3.0 billion in April. This was steeper than the C$2.50 billion shortfall predicted by economists.
Canada’s exports declined 0.6 percent in May, while imports edged up 0.2 percent.
Eurozone finance ministers meet in Brussels in a last ditch attempt to reach bailout deal, after the indebted nation overwhelmingly rejected bailout proposals in Sunday’s referendum. Investors are concerned about Greece’s future in Eurozone, as it wants to restructure its debt load, which amounts to 177 percent of its GDP.
The loonie was trading in a negative territory against most major rivals in the previous session.
The loonie declined to 1.2757 against the greenback, a level not seen since March 31. This is a 0.85 percent depreciation from Monday’s closing value of 1.2650. The loonie may possibly challenge support around the 1.28 zone.
The loonie fell to nearly a 3-month low of 95.97 against the yen, compared to yesterday’s closing quote of 96.86. The next key support for the loonie may be located around the 95.00 mark.
The loonie slipped back to 0.9470 against the aussie, reversing from an early high of 0.9427. Continuation of the loonie’s downtrend may lead it to support around the 0.955 region. The pair was worth 0.9484 when it ended yesterday’s trading.
On the flip side, the loonie remained firmer against the euro, trading at 1.3913. This may be compared to Monday’s closing quote of 1.3984. The loonie is poised to test resistance around the 1.38 zone.
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