Loonie Higher As Oil Jumps After Saudi, Russia Back Supply Cut Extension
May 15 2017 - 12:45AM
RTTF2
The Canadian dollar drifted higher against its most major
counterparts in the early European session on Monday, as oil prices
rallied after Saudi Arabia and Russia jointly committed to extend
supply cuts until March 2018.
Crude for June delivery rose $1.17 to $49.01 per barrel.
Speaking on sidelines of an economic summit in China, Saudi
Energy Minister Khalid Al-Falih and Russian Energy Minister
Alexander Novak said that they had agreed to extend the production
cut deal by another 9 months, as a part of their efforts to
rebalance the global crude market.
The ministers signaled that the new deal would have the same
quota of cuts as per existing deal and would be proposed at the
OPEC meeting on May 25.
Meanwhile, investors took weak Chinese data, geopolitical
worries and the WannaCry ransomware cyberattack in their
stride.
The loonie rose against its major rivals in the Asian session,
with the exception of the aussie.
The loonie firmed to 1.3626 against the greenback, its strongest
since April 28. The loonie is likely to locate resistance around
the 1.35 mark.
The loonie bounced off to 1.4899 against the euro, from an early
weekly low of 1.5000. The next possible resistance for the loonie
is seen around the 1.48 area.
Reversing from an early low of 82.54 against the Japanese yen,
the loonie hit a 4-day high of 83.43. Continuation of the loonie's
uptrend may see it challenging resistance around the 84.5
level.
Data from the Bank of Japan showed that Japan's producer prices
rose 0.2 percent on month in April.
That was unchanged from the March reading, and it surpassed
expectations for a decline of 0.1 percent.
On the flip side, the loonie eased back to 1.0141 against the
aussie, from a high of 1.0112 hit at 11:15 pm ET. The pair finished
last week's trading at 1.0126.
Looking ahead, Canada existing home sales for April, U.S. NAHB
housing market index and New York Fed's empire manufacturing survey
for May are set for release in the New York session.
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