Canadian Dollar Falls As Oil Prices Tumble Amid Coronavirus Fears

The Canadian dollar lost ground against its key counterparts during the European session on Wednesday, after Brent crude oil price fell below US$30 per barrel on demand worries from the spread of coronavirus.

Benchmark Brent crude fell 2.8 percent to $27.92 a barrel, after having fallen 4.3 percent on Tuesday. U.S. crude futures were down more than 5 percent at $25.93 a barrel after losing 6 percent in the previous session.

Oil prices came under pressure on account of lockdown and travel restrictions in many countries sparked by the coronavirus epidemic.

As major economies go into lockdown, the demand collapse from the spreading coronavirus looks increasingly sharp.

On the economic front, the annual inflation rate in Canada fell to 2.2% in February 2020 from 2.4% in the previous month.

The loonie dropped to more than a 4-year low of 1.4473 against the greenback, compared to 1.4203 hit late New York Tuesday. The loonie is poised to challenge support around the 1.50 mark.

The loonie fell to 9-day lows of 1.5812 against the euro and 74.38 against the yen, from its early highs of 1.5605 and 75.86, respectively. The next possible support for the loonie is seen around 1.59 against the euro and 73.5 against the yen.

In contrast, the loonie held steady against the aussie, after having risen to 0.8459 earlier in the session. The pair had closed Tuesday's deals at 0.8518.

Data from Westpac showed that Australia's leading index signaled that the economy is entering an extremely difficult coronavirus period.

The Westpac- Melbourne Institute leading index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell to -0.96 percent in February from -0.49 percent in January.