Canadian Dollar Falls On Declining Oil Prices, GDP Data

The Canadian dollar dropped against its major counterparts in the European session on Friday, as oil prices dropped on concerns that U.S. President Donald Trump's plan to impose tarrifs on steel and aluminium imports may spark trade war, while data showing a slowdown in economic growth in December also weighed.

Data from Statistics Canada showed that GDP grew 0.1 percent on a seasonally adjusted monthly basis.

This was slower than the 0.4 percent growth seen in November. The index matched expectations.

Trump on Thursday indicated that he plans to impose a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports.

Investors are worried that retaliatory action by U.S. trade partners could result in a potential trade war and dampen economic growth.

Crude for April delivery fell $0.24 to $60.75 per barrel.

The loonie traded mixed against its major rivals in the Asian session. While it held steady against the euro and the greenback, it fell against the yen and the aussie.

The loonie dropped to 1.2889 against the greenback, from a high of 1.2820 hit at 7:45 pm ET. On the downside, 1.30 is seen as the next support level for the loonie.

The loonie weakened to 81.75 against the yen, a level unseen since June 2017. The next possible support for the loonie is seen around the 80.5 mark.

Data from the Ministry of Internal Affairs and Communications showed that the unemployment rate in Japan came in at a seasonally adjusted 2.4 percent in January.

That was well beneath forecasts for 2.8 percent, which would have been unchanged from the December reading.

The loonie slipped to a 2-day low of 0.9991 against the aussie, from Thursday's closing value of 0.9953. The loonie is poised to challenge support around the 1.01 level.

The loonie remained at a 2-year low of 1.5867 against the euro, down from a high of 1.5729 seen at 2:45 am ET. If the loonie drops further, 1.60 is possibly seen as its next support level.

Data from Eurostat showed that Eurozone producer price inflation eased in January on energy prices.

Producer prices advanced 1.5 percent year-on-year, slower than the 2.2 percent increase logged in December. Prices were expected to climb 1.6 percent.

The University of Michigan's final consumer sentiment index for February are scheduled for release shortly.