Canadian Dollar Falls Against Majors

The Canadian dollar weakened against the other major currencies in the Asian session on Tuesday amid lackluster risk sentiment engendered by lower oil prices, worries concerning domestic growth and the prospects of further rate reductions in the wake of slowing growth.

TD Bank reportedly lowered its expectations for Canada's economic growth for November, citing lower oil prices. The data is due Friday. Economists widely expect the central bank to cut its interest rates in the near future again.

Last week, the Bank of Canada cut its rate to 0.75 percent from 1 percent to deal with damage caused to the economy by falling oil prices.

Traders also await the interest rate announcement by the U.S. Federal Reserve on Wednesday. Economists expect the Fed to raise its interest rate from near zero around the middle of this year. The January meeting's statement is likely to be gleaned for clues on the itinerary for normalization of rates.

Following the parliamentary elections in Greece over the weekend, Syriza joined hands with the Greek Independents to form an anti-bailout coalition government. While Greek Prime Minister-elect Alexis Tsipras has a mandate to rework the terms of a 240-billion euros bailout program, market participants seem to believe that Greece is less inclined to exit the euro zone.

Tuesday, the Canadian dollar fell 0.27 percent against the U.S. dollar and 0.17 percent against the yen.

In the Asian trading today, the Canadian dollar dropped to 1.2493 against the U.S. dollar for the first time since March 2009. At yesterday's close, the loonie was trading at 1.2469 against the greenback. If the loonie extends its downtrend, it is likely to find support around the 1.25 area.

Against the euro and the Australian dollar, the loonie fell to 4-day lows of 1.4062 and 0.9903 from yesterday's closing quotes of 1.4015 and 0.9878, respectively. The loonie is likely to find support around 1.44 against the euro and 1.00 against the aussie.

The loonie edged down to 94.57 against the yen, from yesterday's closing value of 94.92. On the downside, 92.50 is seen as the next support level for the loonie.

Looking ahead, U.S. durable goods order and home sales for December, U.S. S&P/ Case-Shiller home price index for November, U.S. Richmond manufacturing index, Markit's U.S. flash services PMI for January and the Conference Board's consumer confidence index, also for January are due to be released in New York session.