The Canadian dollar trimmed its early decline against its major opponents in European deals on Tuesday, as the Canadian economy contracted less-than-expected in January.

Data from Statistics Canada showed that Canada's gross domestic product edged down 0.1 percent on month in January, after increasing 0.3 percent in December. Economists had been expecting a decline of 0.2 percent.

Annually, the economy grew 2.4 percent, in line with forecast. The economic growth was at 2.8 percent in December.

Meanwhile, the currency's rise was capped by the decline in oil prices. Talks between western diplomats and Iran are set to resume later in the day, which would lift sanctions on Iran's oil shipments. If an agreement on inspections can be worked out, Iran's oil is expected to add to a global supply glut that has already driven oil prices to the lowest in six years.

The loonie, which fell to a 4-day low of 1.3759 against the euro in early deals, bounced off to 1.3691 after the data. The loonie is thus heading to breach early 4-day high of 1.3652.

The loonie ticked up to 1.2720 against the greenback, following nearly a 2-week decline to 1.2783 around 8:15 am ET. The next possible resistance for the loonie may be located around the 1.26 region.

The loonie snapped back from nearly a 2-month low of 93.74 against the Japanese yen and gained to 94.22. Continuation of the loonie's uptrend may lead it to a resistance around the 95.00 mark.

The loonie moved off from its previous low of 0.9718 against the aussie and resumed rise to 0.9678. The loonie is not far from its early nearly 3-week high of 0.9676.

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