EURCAD Euro vs Canadian Dollar

The Canadian dollar continued to be weaker against most major currencies in the Asian session on Wednesday, as oil prices dropped amid risk aversion after cash-strapped Greece became the only developed country ever to fall into default missing a 1.6 billion euro payment to the International Monetary Fund overnight.

Crude oil for August delivery are currently down $0.73 to $58.74 a barrel.

The Greek crisis worsened, with the debt laden nation missing its EUR 1.6 billion loan payment to the International Monetary Fund, as the Eurogroup earlier rejected any bailout extension in spite of the European Central Bank's decision to hold a meeting to review the emergency funding assistance.

In last minute efforts, the Greek government submitted a request for a two-year bailout with the European Stability Mechanism (ESM) to fully cover its financing needs, along with debt restructuring, the state-backed ANA-MPA news agency reported citing a statement from the office of the Prime Minister Alexis Tsipras.

The ECB is set to hold a Governing Council meeting on Wednesday to review the emergency funding assistance to Greek banks. The lender had refused to raise the cap of its emergency liquidity assistance on Sunday as the Eurogroup rejected any bailout extension a day earlier

The oil supply by the Organization of the Petroleum Exporting Countries or OPEC was increased, due to higher output from Iraq and Saudi Arabia.

The deadline on talks between Iran and the western powers on Iran's nuclear program was extended by a week to July 7. An agreement could have seen sanctions on Tehran withdrawn, enabling a massive flow of Iranian oil into the global markets. This could create a supply glut scenario and possibly bringing oil prices down drastically.

The American Petroleum Institute said in a weekly report released late Tuesday that U.S. crude stockpiles rose 1.9 million barrels in the week to June 26. While, the markets expected a drop of 2 million barrels.

The U.S. Energy Information Administration is set to release its weekly oil report later in the day.

Sentiment towards the loonie was also dampened by the Canadian GDP contracting for the fifth straight month.

Statistics Canada reported Tuesday that Canadian GDP for April fell by 0.1 percent in April following the decline of 0.2 percent in March. Economists expected an increase of 0.1 percent.

Tuesday, the Canadian dollar fell 0.70 percent against the U.S. dollar, 0.77 percent against the yen, 0.01 percent against the euro and 0.97 percent against the Australian dollar.

In the Asian trading now, the Canadian dollar fell to nearly a 4-week low of 1.2502 against the U.S. dollar, from yesterday's closing value of 1.2487. The loonie may test support near the 1.27 region.

Against the euro and the yen, the loonie edged down to 1.3924 and 97.94 from yesterday's closing quotes of 1.3910 and 98.00, respectively. If the loonie extends its downtrend, it is likely to find support around 1.42 against the euro and 96.00 against the yen.

Looking ahead, final June PMI reports for major European economies are due to be released in the European session.

At 5:30 am ET, the Bank of England will publish the financial stability report followed by Governor Mark Carney's news conference, in London.

In the New York session, U.S. manufacturing PMI reports for June, U.S. construction spending for May and weekly U.S. oil inventories report are slated for release.

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