Canadian Dollar Advances As Oil Prices Climb Before OPEC Meeting
May 24 2017 - 1:44AM
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The Canadian dollar climbed against its most major rivals in the
early European session on Wednesday, as oil prices strengthened
ahead of the OPEC meeting in Vienna that is widely estimated to
extend ongoing output cuts to rein in global glut.
Crude for July delivery rose $0.28 to $51.75 per barrel.
The OPEC nations and other producers, including Russia, are
expected to agree on a nine-month extension to the production cuts
when they meet on Thursday. If confirmed by all nations, ongoing
deal earmarking production cuts by 1.18 million barrels a day would
be extended until March 2018.
Further underpinning oil prices were an industry data showing a
draw of 1.5 million barrels in crude oil inventories last week.
Gasoline stocks fell by 3.15 million barrels and distillate
inventories eased 1.85 million barrels, the American Petroleum
Institute report showed.
This is followed by official data from the Energy Information
Administration later in the day. Economists expect the crude
inventories to drop by 2.419 million barrels, distillates to fall
by 743,000 barrels and gasoline stocks to be lower by 1.19 million
barrels.
Meanwhile, European stocks were little changed ahead of the
minutes for the May 2-3 FOMC meeting later in the day, with
investors looking for signs on whether the Fed will lift rates in
June.
The loonie showed mixed performance in the Asian session. While
the loonie dropped against the greenback and the euro, it rose
against the aussie. Against the yen, it held steady.
Reversing from an early 2-day low of 1.3540 against the
greenback, the loonie firmed to 1.3502. Continuation of the
loonie's uptrend may see it challenging resistance around the 1.34
region.
The loonie strengthened to a 2-day high of 1.5090 against the
euro, compared to 1.5105 hit late New York Tuesday. If the loonie
rises further, 1.49 is possibly seen as its next resistance
level.
Survey by the GfK market research group showed that Germany's
consumer confidence is set to continue its rising trend in June on
the back of further improvement in expectations on income and
economy, defying expectations for stability.
The forward-looking Consumer Confidence Index rose to 10.4
points from 10.2 points in May. Economists had expected the measure
to remain unchanged.
The loonie spiked up to 82.91 against the yen, its strongest
since May 17. The next possible resistance for the loonie-yen pair
is seen around the 84.00 mark.
Data from the Cabinet Office showed that Japan's leading index
increased to a 21-month high in March as initially estimated.
The leading index, which measures the future economic activity,
rose to 105.5 in March from 104.7 in February.
On the flip side, the loonie retreated to 1.0098 against the
aussie, from a 2-day high of 1.0075 hit at 12:45 am ET. The pair
finished Tuesday's trading at 1.0100.
Looking ahead, at 8:45 am ET, the ECB President Mario Draghi
speaks at the First Conference on Financial Stability organised by
Bank of Spain, in Madrid.
The U.S. house price index for March, existing home sales for
April and the Federal Reserve's minutes of the May meeting are due
in the New York session.
The Bank of Canada announces its decision on interest rates at
10:00 am ET. Economists expect the bank to keep rates on hold at
0.50 percent.
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