The loonie continued its tumble on Tuesday in the wake of plummeting oil, a robust US dollar, and less than inspiring PMI data. The Canadian Dollar slid as low as 78.27 US cents at 10:05 am before leveling off to close at 78.68 cents, down .0035 cents or another .44% from Monday's close.
The loonie has been under pressure all week as oil has been beleaguered by oversupply concerns including an increase in US crude stockpiles and a possible Iranian deal that would lift sanctions and bring even more oil to market. Monday's crude prices saw the biggest one-day loss in three months.
A growing Canadian trade deficit and less than stellar June purchasing data put added pressure on the loonie. All eyes will now be on Friday's June unemployment figures which will weigh heavily on the Bank of Canada's July 15 interest rate decision.
The US Dollar continues to benefit from the ongoing Greek bailout crisis as a perceived safe haven for the risk averse. As investors await the next chapter in the Greek debt drama, the euro has struggled to find its footing. This coupled with an uptick in US manufacturing activity in June has further fueled a surging dollar.
In emergency meetings on Tuesday, Greek Prime Minister Alexis Tsipras has suggested that the original bailout package from international creditors could, in fact, still be on the table with "some changes" but German Chancellor Angela Merkel sounded less than optimistic suggesting that Greece was days from collapse and that there was nothing new to discuss. While the ECB has continued provide liquidity assistance, they have also limited access to cash. A Wednesday morning conference call has been set to discuss new proposals from Tsipras as Greek banks will remain closed an eighth business day.
Sources have confirmed that US President Barack Obama called Chancellor Merkel on Tuesday and urged her to convince European leaders and creditors to avoid a Greek exit from the Eurozone.