The Canadian dollar weakened slightly against the US currency on Tuesday, pressured by sagging oil and metal prices, while the federal government's budget had little impact on the currency. The weakness followed four straight sessions of gains against the greenback, largely due to firmer commodity prices and easing risk aversion.
The Canadian dollar officially closed at C$1.2263 to the US dollar, or 81.55 US cents, down from C$1.2241 to the US dollar, or 81.69 US cents, on Monday. Shortly, the Conservative government unveiled a budget and stimulus package that promised billions in tax cuts and spending to help pull the economy out of recession, laying out plans for a budget deficit for the first time after 11 straight years of surplus.
The official release of the budget had a negligible impact on the Canadian currency, said Shane Enright, currency strategist at CIBC World Markets. Beginning late last week, government officials began unveiling details of the budget, a rare move that analysts said was aimed at preparing markets for the fiscal plan.