The Canadian dollar fell against its major counterparts in the European session on Wednesday, as trade and growth worries sapped investor appetite for riskier assets.
There is skepticism and confusion about the truce between the U.S. and China on trade after China promised action but gave no details on the tentative truce.
The bond market is flashing warning signs after the U.S. Treasury curve inverted for the first time in more than a decade.
Investor confidence is also waning due to Brexit-related uncertainty after Theresa May's government suffered three successive defeats in the British Parliament on Tuesday.
The Bank of Canada will announce its interest rate decision at 10:00 am ET. Economists widely anticipate the central bank to keep benchmark rate unchanged at 1.75 percent.
The currency traded mixed against its major rivals in the Asian session. While it dropped against the greenback and the euro, it held steady against the yen. Against the euro, it advanced.
The loonie declined to a 5-day low of 1.3295 against the greenback, from a high of 1.3253 seen at 7:00 pm ET. The next possible support for the loonie is seen around the 1.35 level.
The loonie fell to a 5-day low of 1.5078 against the European currency, reversing from a high of 1.5032 touched at 5:30 pm ET. On the downside, 1.52 is seen as the next likely support level for the loonie.
Preliminary data from Eurostat showed that Eurozone retail sales grew in October after decreasing in the previous month.
Retail sales grew 0.3 percent from September, when they fell 0.5 percent, after the stagnation reported earlier was revised. Economists had forecast a 0.2 percent increase for October.
The loonie pared gains to 84.99 against the yen, from an early high of 85.16. The loonie is poised to find support around the 84.00 mark.
The latest survey from Nikkei showed that Japan services sector continued to expand in November, albeit at a fractionally slower pace, with a PMI score of 52.3.
That's down from 52.4 in October, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.
The loonie held steady against the aussie, after having advanced to a weekly high of 0.9678 at 12:00 am ET. This follows a 2-day low of 0.9749 set in the early Asian session. At yesterday's close, the pair was worth 0.9731. Looking ahead, the Bank of Canada announces its interest rate decision at 10:00 am ET. Economists forecast the benchmark rate to remain unchanged at 1.75 percent.
The Federal Reserve's Beige book report is due at 2:00 pm ET.