2018.03.2909:53:00UTC+00Loonie Weakens After Canada GDP Disappoints

The Canadian dollar lost ground against its major counterparts in the European session on Friday, as the economy unexpectedly contracted in January, driven by lower output of non-conventional oil extraction and decreased activity in real estate.

Data from Statistics Canada showed that real gross domestic product unexpectedly edged down?in January.

The GDP fell a seasonally adjusted 0.1 percent on month in January, following a revised?0.2 percent rise in December.

Economists were looking for a 0.1 percent increase.

On year, the economy grew 2.7 percent on a seasonally adjusted basis, slower than the 2.9 percent increase seen by economists.

The December growth was revised up to 3.4 percent.

Oil prices declined even as OPEC's major players signalled a willingness to extend their supply quota plan with Russia beyond 2018.

Reuters reports Saudi Arabia and Russia are considering a plan that would have them coordinate on supply quotas for up to 20 years in hopes of boosting oil prices.

The loonie traded mixed against its major counterparts in the Asian session. While it fell against the yen and the aussie, it held steady against the greenback and the euro.

The loonie weakened to a 6-day low of 1.2939 against the greenback, from a high of 1.2889 hit at 8:15 am ET. The loonie is likely to find support around the 1.32 region.

The loonie reversed from an early 6-day high of 1.5872 against the euro, falling to 1.5930. The next possible support for the loonie is seen around the 1.61 level.

Data from the Federal Labor Agency showed that German unemployment decreased notably in March.

The number of people out of work decreased by 19,000 in March. Unemployment was expected to fall 15,000.

The loonie dropped to a 2-day low of 0.9930 against the aussie, after rising to 0.9882 at 9:45 pm ET. The loonie is seen finding support around the 1.01 region.

The loonie edged down to 82.28 against the yen, off its early high of 82.74. On the downside, 80.00 is seen as the next support level for the loonie.

Data from the Ministry of Economy, Trade and Industry showed that Japan's retail sales advanced a seasonally adjusted 0.4 percent on month in February.

That was shy of expectations for 0.6 percent following the upwardly revised 1.6 percent contraction in January.

The University of Michigan's final consumer sentiment index for March is due shortly.