The loonie was down 0.63 of a cent to 96.67 cents US, reversing a chunk of Monday's 0.85 cent jump, after Statistics Canada said the trade deficit went from $3 million in March to $567 million the following month.
Exports edged down 0.2 per cent during the month to $40.3 billion dollars, led by decreases in metal ores and non-metallic minerals, energy products, and industrial machinery.
Imports rose 1.2 per cent to 440.8 billion dollars amid higher levels of energy products, motor vehicles and parts.
Elsewhere on the economic front, other data showed that the U.S. trade deficit widened 8.5 per cent to US$40.3 billion in April as imports outpaced exports.
Also, U.S. home prices soared 12.1 per cent in April from a year earlier, the biggest gain since February 2006. Real estate data provider CoreLogic also says prices also rose 3.2 per cent in April from March, much better than the previous month-to-month gain of 1.9 per cent.
Tuesday was probably the lightest data day of the week, but the pace picks up on Wednesday with the ADP private payrolls report for May and the ISM’s survey of activity in the services sector. Most important will be the non-farm payrolls report for May on Friday. The payroll figures are usually the U.S. economic release with the greatest market impact.
Canadian employment data also comes out on Friday.
It's also a big week in Europe, with the European Central Bank meeting to discuss the ailing eurozone economy and whether anything more needs to be done to get it growing again. The latest speculation in the markets is that the ECB will refrain from announcing any big new measures Thursday.
Commodities were mixed as July crude on the New York Mercantile Exchange lost 14 cents to US$93.31 a barrel.
July copper edged up four cents to US$3.37 a pound and August gold fell $14.70 to US$1,397.20 an ounce.