Canadian Dollar Falls As Inflation Eases

The Canadian dollar dropped against its major counterparts in the New York session on Tuesday, as Canada's consumer inflation slowed more than expected in August.

Data from Statistics Canada showed that the consumer price index rose 7.0 percent on a year-over-year basis in August, down from a 7.6 percent gain in July. Economists has expected a 7.3 percent increase.

The CPI rose 0.1 percent on a seasonally adjusted monthly basis in August, same as seen in July.

Core CPI, excluding food and energy, eased to 0.2 percent from 0.5 percent in the previous month.

The loonie was down against the aussie, at a 1-week low of 0.8936. If the loonie falls further, 0.91 is possibly seen as its next support level.

The loonie fell to near a 2-year low of 1.3345 against the greenback and a 4-day low of 1.3324 against the euro, off its early 4-day highs of 1.3227 and 1.3242, respectively. The loonie is poised to find support around 1.36 against the greenback and 1.35 against the euro.

The loonie eased to 107.68 against the yen, from a 4-day high of 108.33 seen at 3:30 am ET. On the downside, 103.00 is likely seen as the next support level for the currency.