Loonie Drops Amid Oil Price Fall and Rate Concerns

Canada's Loonie dipped to a six-day low on June trade data despite a significant increase in trade surpluses, according to Reuters.

The Canadian dollar weakened to around 1.4070 per US dollar as oil prices fell by 5.7% to approximately $75.80 per barrel.

This drop in oil prices impacted Canada's 'terms of trade', which measures the country's earnings on exports versus its import costs, with a weaker terms of trade translating into decreased demand for Canadian dollars.

The strong June surplus of C$3.86 billion did not fully offset this pressure, and the softer currency can inflate the value of trade flows in Canadian dollars.