Canadian Dollar Drops Amid Falling Oil Prices

The Canadian dollar traded lower against its major counterparts in European deals on Monday, as oil prices declined after Iraq refused to join the OPEC's proposed plan to slash oil production and the U.S. oil rig count increased for the fifth-straight week.

Crude for December delivery fell $0.36 to $50.49 per barrel. Iraqi oil minister Jabber Al-Luaibi on Sunday asked OPEC for an exemption from contributing to production cuts, as the nation is waging war against Islamic militants.

OPEC will meet later this month to find out the details of market share of crude oil to be allowed to pump by members, in order to implement an accord at meeting in November.

Data from the industry provider Baker Hughes showed that the number of active U.S. oil rigs totaled 443 in the week ended October 21, up by 11 from the prior week.

Canada's consumer prices in grew less than expected last month and retail sales fell unexpectedly in August, separate reports showed last week, raising expectations for a rate cut by the Bank of Canada.

The currency has been trading lower against its key counterparts, except the Japanese yen, in the Asian session.

The loonie pared gains to 77.84 against the Japanese yen, from an early high of 77.98. Continuation of the loonie's downtrend may see it challenging support around the 75.5 mark.

Survey figures from IHS Markit showed Japan's manufacturing activity expanded at the fastest pace in nine months in October.

The Nikkei Flash Manufacturing Purchasing Managers' Index, or PMI, rose to 51.7 in October from 50.4 in September.

The loonie fell back to 1.3356 against the greenback, heading to violate its early more than 7-month low of 1.3360. If the loonie extends slide, 1.35 is likely seen as its next support level.

The loonie slipped to a 4-day low of 1.4544 against the euro, off its previous high of 1.4492. The loonie is seen finding support around the 1.465 region.

Flash survey from IHS Markit showed Eurozone private sector expanded at the fastest pace in ten months in October

The composite output index climbed to 53.7 in October from 52.6 in September. It was forecast to increase slightly to 52.8.

The loonie held steady against the aussie, after sliding to more than a 2-year low of 1.0192 at 4:30 am ET. Further downtrend may take the loonie to a support near the 1.03 region.

Looking ahead, Canada wholesale sales for August are set for release at 8:30 am ET.

At 9:00 am ET, the Federal Reserve Bank of New York President William Dudley will deliver opening remarks at the Federal Bank of New York Annual Conference.

Subsequently, Federal Reserve Bank of St. Louis President James Bullard speaks about the economy and monetary policy at the Association for University Business and Economic Research in Arkansas.

Markit's U.S. flash manufacturing PMI for October will be out at 9:45 am ET.

The Bank of Canada Governor Stephen Poloz, will testify along with Senior Deputy Governor Carolyn Wilkins before the House of Commons Standing Committee on Finance in Ottawa at 3:30 pm ET.

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