Canadian Dollar Advances As Oil Prices, European Shares Rise
22 September 2021 - 03:56PM
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The Canadian dollar climbed against its most major rivals in the
European session on Wednesday, as oil prices rose following an
industry data showing a larger than expected fall in U.S. crude
inventories and on improved investor sentiment following an
assurance from troubled developer Evergrande that it would make
bond payments due tomorrow.
Data from the American Petroleum Institute showed that U.S.
crude stockpiles dropped by 6.1 million barrels in the week ended
September 17, compared to a 5.4 million-barrel drop in the previous
week. Analysts had expected a decline of 2.4 million barrels.
China Evergrande Group's main unit agreed to make bond payments
due on Thursday, easing some of the concerns over a messy default
that could have repercussions on the broader Chinese economy.
In a statement, Hengda Real Estate Group said that it is set to
make payment on 5.8% September 2025 bond due on September 23.
The People's Bank of China injected liquidity of about 110
billion Chinese yuan into the banking system to avert a credit
crisis.
The loonie appreciated to 1.2770 against the greenback and
1.4977 against the euro, off its early lows of 1.2826 and 1.5036,
respectively. The next possible resistance for the loonie is seen
around 1.25 against the greenback and 1.48 against the euro.
The loonie reached as high as 85.79 against the yen, from a low
of 85.09 seen at 5 pm ET. If the loonie rises further, 88.00 is
likely seen as its next resistance level.
In contrast, the loonie held steady against the aussie, after
recovering from an Asian session's low of 0.9295. The pair had
closed yesterday's deals at 0.9262.
Looking ahead, U.S. existing home sales for August will be
published in the New York session.
At 2:00 pm ET, the Fed announces its decision on interest rate.
Economists widely expect the federal funds rate to be kept at 0 -
0.25 percent.
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