Canadian Dollar Falls As Economy Contracts

The Canadian dollar slipped against its major rivals in European deals on Tuesday, as data showed that Canadian economy contracted for the fourth consecutive month in April.

Data from Statistics Canada showed that gross domestic product declined 0.1 percent in April, contradicting expectations for a 0.1 percent gain. In March, Canada's economic growth dropped by 0.2 percent.

On an annual basis, Canada's economic growth slowed 1.2 percent in April, following a 1.5 percent increase in March. Economists had been expecting a 1.6 percent growth.

Meanwhile, crude oil prices nudged higher after hitting 3-week lows as focus remained on the Greek debt crisis.

Crude oil was up 34 cents at $58.67 a barrel on the New York Mercantile Exchange.

The loonie was trading mixed in the previous session. While the loonie held steady against the aussie, it was higher against the euro and the greenback. Against the yen, the loonie fell.

The loonie reversed from an early high of 99.04 against the yen and was trading at 98.51. The loonie is thus heading to pierce its early nearly 2-month low of 98.31. If the loonie extends slide, 97.5 is possibly seen as its next support level.

The loonie dropped to a 3-week low of 1.2425 against the greenback, after having advanced to 1.2362 at 8:15 am ET. Continuation of the loonie's downtrend may take it to a support around the 1.25 mark.

The loonie weakened to a 5-day low of 0.9570 against the aussie, off early high of 0.9491. The loonie is seen finding support around the 0.965 area. At yesterday's close, the pair was worth 0.9520.

The loonie was trading lower at 1.3937 against the euro, following an advance to 1.3807 at 5:00 am ET. The next possible support for the loonie may be located around the 1.42 zone.

The flash data from Eurostat showed that Eurozone inflation slowed slightly in June after accelerating in May.

Inflation eased to 0.2 percent in June, in line with forecast, from 0.3 percent in the prior month.

Looking ahead, U.S. Chicago PMI and U.S. consumer confidence, both for June, are due shortly.