Canadian Dollar Advances On Rising Oil Prices
January 05 2021 - 2:29AM
RTTF2
The Canadian dollar climbed against its most major counterparts
in the European session on Tuesday, amid higher oil prices
following a media report that the OPEC is mulling output reduction
in February.
Reuters reported that OPEC and its allies are considering a 0.5
million bpd cut in February, citing bearish risks and tepid demand
due to the virus crisis.
Talks will resume at 1430 GMT, as OPEC+ could not reach an
agreement on changes to February's oil output on Monday.
While Russia and Kazakhstan supported to lift production by 0.5
million bpd, Iraq, Nigeria and the United Arab Emirates wanted to
keep output unchanged.
The report added that the OPEC+ joint ministerial committee
"stressed that the reimplementation of COVID-19 containment
measures across continents, including full lockdowns, are dampening
the oil demand rebound in 2021".
The loonie rebounded to 0.9808 against the aussie, from a 4-day
low of 0.9844 hit at 2:15 am ET. The loonie is likely to test
resistance around the 0.96 region, if it gains again.
The loonie edged up to 1.2730 against the greenback, compared to
Monday's close of 1.2772. The currency may face resistance around
the 1.22 region.
The loonie gained to 1.5624 against the euro at 4:45 am ET and
has stabilized since then. The next possible resistance for the
loonie is seen around the 1.54 level.
Data from the Federal Labor Agency showed that German
unemployment declined in December despite the government tightening
the coronavirus containment measures.
The number of people out of work fell 37,000 from November,
confounding expectations for an increase of 10,000. Unemployment
had decreased by 40,000 in November.
In contrast, the loonie pulled back to 80.63 against the yen,
from an early high of 80.92, and held steady thereafter. The loonie
is poised to challenge support around the 78.00 mark.
Looking ahead, Canada industrial product price index for
November and U.S. ISM manufacturing index for December are due in
the New York session.
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