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Canadian Dollar Falls On Widening Trade Deficit

05:43, 6th October 2015

(RTTNews) - The Canadian dollar drifted lower against its key counterparts on Tuesday, after data showed that Canada's trade deficit widened more-than-forecast in August.

Data from Statistics Canada showed that Canada's merchandise trade deficit increased to C$2.5 billion in August from a revised C$817 million in July. The figures also exceeded the C$1.07 billion shortfall predicted by economists.

Canada's exports declined 3.6 percent in August, while imports edged up 0.2 percent. The decline in exports was the biggest since January, 2012.

The currency traded in a positive territory in the Asian session, on firming oil prices. Traders responded positively to the news that Russia was prepared to meet with OPEC and non-OPEC nations to discuss the global oil market situation.

The loonie depreciated by 0.98 percent to a 5-day low of 0.9337 against the aussie, off early 4-week high of 0.9246. The loonie is seen finding support around the 0.94 mark. The pair ended Monday's trading at 0.9265.

The loonie declined to 1.3134 against the greenback and 1.4743 against the euro, reversing from an early high of 1.3065 and a near a 5-week high of 1.4607, respectively. The next possible support for the loonie may be located around 1.325 against the greenback and 1.486 against the euro.

Pulling away from an early 5-week high of 92.23 against the yen, the loonie weakened to 91.62. On the downside, the loonie may challenge support around the 90.00 region.

Canada Ivey PMI for September is due shortly.

At 1:00 pm ET, European Central Bank President Mario Draghi will give a welcome speech at the Art on Site inauguration in Frankfurt.

At 5:30 pm ET, Federal Reserve Bank of San Francisco President John Williams is expected to speak about the US economic outlook at the Urban Land Institute's Fall Meeting in San Francisco.

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