Canadian Dollar Weakens As Oil Prices Drop

The Canadian dollar dropped against its major counterparts in the European session on Tuesday amid falling oil prices, as weak economic data across the globe fuelled concerns that global demand may be faltering.

WTI crude for December delivery fell $1.17 to 83.41 a barrel.

U.S. business activity shrank for a fourth month in October, in a sign that client demand is falling.

Data released over the weekend showed demand from China remained lackluster in September as a result of strict COVID-19 policy that has crimped business and trade.

Following Xi Jinping's shocking move to tighten his grip on power at a major leadership reshuffle, it is now clear that the country won't compromise on issues over Taiwan and the zero-COVID policy.

The loonie fell to 1.3568 against the euro and 108.33 against the yen, after rising to 1.3511 and 108.87, respectively in early deals. The next likely support for the loonie is seen around 1.38 against the euro and 102.5 against the yen.

The loonie edged down to 0.8684 against the aussie and 1.3748 against the greenback, pulling away from its early highs of 0.8633 and 1.3679, respectively. The loonie is likely to find support around 0.88 against the aussie and 1.40 against the greenback.

Looking ahead, U.S. consumer confidence index for October and FHFA's house price index and S&P/Case-Shiller home price index for August will be out in the New York session.