Canadian Dollar Weakens As Oil Prices, European Shares Decline

The Canadian dollar declined against its most major counterparts in the European session on Tuesday, as oil prices fell on receding worries about a shutdown of the Colonial Pipeline and on a drop in European shares amid inflation worries.

The operator of the US' Colonial Pipeline, which is the largest refined-products pipeline in the country, said that one of its lines has been partially restored and that a phased approach has been executed to facilitate a return to service by the end of the week.

During the White House press briefing on Monday, Homeland Security adviser Elizabeth Sherwood-Randall said the cyber breach did not affect fuel supplies.

Fears about inflation rattled global markets, as traders hope that growing price pressures might prompt the Fed to wind back monetary policy support sooner than expected.

China's factory gate prices rose at the fastest rate in three and a half years in April, official data showed.

Wednesday's U.S. CPI report is expected to show an annual rise of 3.6 percent in April.

The loonie retreated to 1.4747 against the euro and 0.9502 against the aussie, off its prior session's high of 1.4667 and a 4-day high of 0.9467, respectively, The next possible support for the loonie is seen around 1.49 against the euro and 0.96 against the aussie.

The loonie hit a 4-day low of 89.36 against the yen, down from Monday's close of 89.88. The loonie may locate support around the 86.00 level.

Data from the Ministry of Communications and Internal Affairs showed that Japan household spending grew 6.2 percent on year in March - coming in at 309,800 yen.

That beat forecasts for an increase of 1.5 percent following the 6.6 percent drop in February.

The loonie, however, rose to 1.2126 against the greenback, after falling to 1.2088 at 1:30 am ET. The loonie is seen finding resistance around the 1.25 mark.