The Canadian dollar fell to new multi-day lows against its major counterparts during Tuesday's early session despite higher oil prices. Crude oil accounts for about a tenth of Canada's export revenue.
Crude oil remained above the $40 mark in Asian trading today, after having lost up to 4% in the past few trading sessions on grim U.S. economic news that pointed to a deepening recession in the world's largest economy. US light crude for March delivery fell $1.60 to settle at $40.08 a barrel in New York trading on Monday after a US government report showed consumer spending fell for the sixth straight month in December.
The oil prices also rose as Japan and Australia stepped up efforts to boost ailing economies, helping calm fears about deteriorating corporate profits.
The Canadian dollar dropped to an 11-day and 8-day lows against its US and Japanese counterpart during Tuesday's early trading. The Canadian currency hit lows of 1.2514 against the US dollar and 71.51 against the yen, compared to Monday's closing value of 1.2453 and 71.87, respectively. If the Canadian dollar weakens further, it may likely find support near the 1.274 level against the greenback and 69.7 level against the yen.
In economic news, the Ministry of Health, Labor and Welfare said that the value of Japan's total cash earnings was down 1.4 percent in December. That was slightly higher than the 1.5 percent annual decline that analysts had been expecting after the revised 0.7 percent fall in November.
From US, a data on Pending Home Sales, which is a leading indicator of housing market activity released by the National Association of Realtors, is due out at 10 am ET today. The pending home sales index showed a 4% monthly drop for November, while it was down 5.6% year-over-over. The pending home sales indexes for the Northeast declined 7.2%, while the index for the Midwest, the South and the West fell 6.7%, 2.2% and 2.4%, respectively.
The Canadian dollar has been weakening against its European opponent during Tuesday's Asian session. At about 4:30 am ET, the loonie touched a 6-day low of 1.6038 versus the euro, compared to Monday's closing value of 1.5995. On the downside, the Canadian currency may likely target the 1.629 level against the euro.
In economic news, Eurozone industrial producer price inflation eased significantly to 1.8% year-on-year in December from 3.3% in November, the Eurostat said today. Economists were expecting the producer price inflation rate to slow to 2.1%.
In December 2008, the producer price index dropped 1.3% from the prior month compared to a revised 2% fall in November. Economists had expected producer prices to fall 1.2%.
Against the Australian dollar, the Canadian currency edged down to a 4-day low of 0.7972 following the Reserve Bank of Australia's interest rate announcement. The Reserve Bank of Australia slashed the nation's cash rate by 100 basis points to a 45-year low of 3.25%. Thereafter, the loonie ticked up slightly but weakened shortly and is now trading at 0.7958. The Aussie-loonie pair closed Monday's deals at 0.7868.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.