Overall, the Canadian dollar offers some value at current levels against the US currency, especially with support for gold prices.

The Canadian dollar continued to drift weaker on Monday with a combination of a firmer US currency and weak commodity prices.

The Bank of Canada interest rate decision will be watched closely on Tuesday with markets expecting a further 0.50% rate cut to 1.00%. At the last council meeting the bank suggested it would be reluctant o cut rates again, but conditions have certainly deteriorated since that meeting.

Overall, there is scope for a rate cut, although the risks suggest that the central bank may prefer to be slightly more cautious at this stage.

The Canadian currency will find it difficult to gain support unless there is a recovery in risk appetite and rebound in commodities, but gold prices rallied on Tuesday which should offer some support.