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Canadian dollar falls more than half a cent on weak GDP reading

A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto in this January 23, 2015, file photo. The Canadian dollar pared earlier session losses against its U.S. counterpart on Tuesday, strengthening after data showed January growth was better than feared. REUTERS/Mark Blinch/Files

MARK BLINCH/REUTERS

The Canadian dollar fell Tuesday, losing 0.63 of a cent against the US dollar, amid disappointing economic news as Canada's GDP contracted 0.1% in May against expectations of a rebound.

The loonie has been under pressure most of the month as CAD/USD moved from 79.86 cents at the start of June, to 81.81 cents on June 18, to its current 80.06 cents, losing 1.75 cents or 2.1% since mid-month on soft oil prices, a robust US dollar, continued momentum on Wall Street, and upbeat US consumer sentiment in June.

The ongoing Greek debt crisis has further strengthened the U.S. dollar, which has proven to be a global safe haven as Athens is poised to miss its midnight deadline payment of 1.6 billion euro to the IMF. Despite petitioning for a new bailout at the 11 hour, creditors have indicated that a deal would likely not be reached and would reconvene on Wednesday to discuss the crisis.

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Greece is the first developed country to be downgraded to emerging market status.

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