Canadian Dollar Declines As Lira Crisis Sparks Contagion Fears

The Canadian dollar slipped against its major counterparts in the European session on Monday amid risk aversion, as investors kept an eye on a worsening trade dispute between the United States and Turkey.

The lira recouped some losses after hitting a new record low early today on concerns about a deepening rift with the United States.

Investors continue to worry about potential contagion from Turkey's woes to other emerging markets.

Turkish President Recep Tayyip Erdogan blamed the currency's plunge as "a plot against Turkey" and said he would seek new new alliances and markets unless the U.S. did not back off its hostile stance.

The currency has been trading in a negative territory against its major rivals in the Asian session, with the exception of the aussie.

The loonie declined to 1.3170 against the greenback, its lowest since July 24. The loonie is likely to challenge support around the 1.33 level.

The loonie fell to 1.4996 against the euro and held steady therafter. If the loonie falls further, 1.52 is likely seen as its next support level.

The loonie weakened to a 1-1/2-month low of 83.63 against the yen, from last week's closing value of 84.34. On the downside, 82.00 is possibly seen as the next support level for the loonie.

On the flip side, the loonie edged up to 0.9558 against the aussie, from a low of 0.9592 seen at 7:15 pm ET. The next likely resistance for the loonie is seen around the 0.94 level.