Canadian Dollar Lower As Oil Prices Drop

The Canadian dollar weakened against its major counterparts in the European session on Monday, as oil prices fell amid weak factory activity data from China and concerns about further monetary tightening by the Federal Reserve.

Crude for June delivery fell $1.73 to 75.05 per barrel.

Official data showed that China manufacturing PMI dropped to 49.2 in April, down from 51.9 in the previous month and expectations of 51.4 percent.

The non-manufacturing PMI edged down to 56.4 from 58.2 in March.

Investors awaited the two-day monetary policy meeting by the Fed, at which a 25 basis point hike is certain.

The loonie eased to 100.60 against the yen and 1.3581 against the greenback, reversing from its early 4-1/2-month high of 101.07 and a 6-day high of 1.3530, respectively. The next possible support for the loonie is seen around 98.00 against the yen and 1.38 against the greenback.

The loonie slipped to 0.9016 against the aussie and 1.4953 against the euro, off its early 2-week high of 0.8946 and a 1-week high of 1.4900, respectively. The loonie is poised to challenge support around 0.92 against the aussie and 1.51 against the euro.

Looking ahead, U.S. ISM Manufacturing PMI for April and construction spending data for March are due to be released in the New York session.