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Canadian Dollar Declines Against Majors

The Canadian dollar edged lower on Tuesday as the price of crude oil slipped back near a five-month low as traders fret over demand growth amid uncertainty in the euro zone financial situation.

Light Sweet Crude Oil (WTI) futures for June delivery lost $1.08 to $96.86 a barrel. Yesterday, oil dived to a 5-month low as the eurozone debt concern resurfaced following the changed political scenario in France and Greece.

Concerns remained about the possibility of a new left-wing coalition government in Greece, which vowed to end austerity measures and reject the terms of Greece-Troika bailout deal.

The latest political uncertainty occurred at a time when Greece is facing an immediate task of securing the next tranche of bailout from Troika to avoid a possible default.

Also, the results of French election results weighed on sentiment as the market is keenly waiting for the policies of the newly elected socialist President François Hollande.

While saying that his mission is to "give European construction a growth dimension, Hollande pledged to push for less austerity and more growth in the region.

After posting solid gains in the Asian session, the Canadian dollar reached a 4-day low of 1.3005 against the euro around 7:15 am ET. On the downside, the loonie may target support level around 1.3011 in the near-term at which the 10-day SMA lies in the pair.

Germany's industrial output growth beat expectations in March with production across most of the major industrial groups improving, data from the Federal Ministry of Economy and Technology showed today.

The seasonally adjusted industrial output rose 2.8 percent month-on-month in March following a 0.3 percent decline in February. Economists expected a 0.8 percent increase.

On a yearly basis, industrial production improved unexpectedly by an adjusted 1.6 percent, following a flat reading in February. Expectations were for a 1.2 percent fall.

The Canadian dollar that advanced to 4-day highs of 0.9926 against the greenback and 80.62 against the yen in Asian trading pared gains in subsequent trading hours. The loonie reached as low as 0.9982 against the greenback and 79.90 versus the yen before leveling off around 7:00 am ET.

Looking ahead, the Canada Mortgage and Housing Corporation is set to release its housing starts report for April at 8:15 am ET. The seasonally adjusted annual rate of housing starts are expected to come in at 204,000 units in the month, down from 215,200 units in March.

by RTTNews Staff Writer

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