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Canadian Dollar Climbs As Oil Prices Rally

20:36, 5th December 2016

(RTTNews) - The Canadian dollar advanced against most major counterparts in the European session on Monday, as oil prices climbed, with last week's landmark decision by the OPEC to cap oil production raising hopes for tightened oil markets.

Crude for January delivery rose $0.46 to $52.14 per barrel.

Investors now focus on the upcoming meeting between OPEC & non-OPEC countries on December 10 in Vienna, where the nations would finalize the details on the output cuts.

Starting from January, OPEC nations are expected to reduce the output by around 1.2 million barrels per day and non-OPEC countries would contribute another 600,000 barrels per day to the cuts.

The currency was underpinned by rising European shares, as investors appeared to shrug off the result of the Italian referendum and subsequent resignation of Prime Minister Matteo Renzi.

The currency was lower against its major counterparts in the Asian session, with the exception of the euro.

The loonie climbed to a 7-1/2-month high of 86.06 against the yen, off its early 5-day low of 84.59.The loonie is likely to locate resistance around the 88.00 mark.

Survey figures from Cabinet Office showed that Japan's consumer confidence declined for the second straight month in November to the weakest level in six months.

The seasonally adjusted consumer confidence index fell to 40.9 in November from 42.3 in the previous month. In September, the reading was 43.0.

The loonie, having fallen to a 4-day low of 1.3357 against the greenback at 6:15 pm ET, reversed direction and advanced to 1.3274. If the loonie extends rise, 1.30 is possibly seen as its next resistance level.

The loonie was trading at 0.9889 against the aussie, reversing from an early 5-day low of 0.9939. Further gains may take the loonie to a resistance near the 0.97 region.

On the flip side, the loonie held steady against the euro, following a 5-day low of 1.4271 hit at 7:05 am ET. This may be compared to the Asian session more than 1-year high of 1.4027.

Survey results from IHS Markit showed that the euro area private sector expanded at the fastest pace in 11 months in November but the pace of growth was slightly weaker than initially estimated.

The final composite output index rose less-than-estimated to 53.9 in November from 53.3 in October. The flash score was 54.1.

Looking ahead, Markit's U.S. final services PMI, ISM non-manufacturing composite index and labor market conditions index for November are due in the New York session.

The Federal Reserve Bank of St. Louis President James Bullard will speak about the US economic outlook at the Arizona State University's annual economic forecast luncheon in Phoenix at 2:05 pm ET.

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