Canadian Dollar Drops Amid Falling Oil Prices
February 21 2018 - 1:29AM
RTTF2
The Canadian dollar dropped against its most major opponents in
the European session on Wednesday, as oil prices weakened in the
wake of a higher dollar ahead of the release of minutes from the
Federal Reserve's meeting in January.
Crude for April delivery fell $0.53 to $61.26 per barrel.
Investors focus on minutes, due at 2:00 pm ET, for further
insight on inflation and interest rate outlook. The focus also
remains on a slew of speeches by Fed officials for hints about the
path for further rate hikes this year.
A higher dollar tends to make oil and other dollar-denominated
commodities more costlier for holders of other currencies.
The American Petroleum Institute releases its weekly crude
inventory report later in the day, while the Energy Information
Administration will publish its official data on Thursday. The
releases have been delayed by a day due to U.S. holiday on
Monday.
The loonie traded mixed against its major rivals in the Asian
session. While it rose against the aussie and the yen, it fell
against the euro and the greenback.
The loonie dropped to 84.80 against the yen, from a 6-day high
of 85.26 hit at 10:15 pm ET. Continuation of the loonie's downtrend
may take it to a support around the 82.5 level.
Data from the Ministry of Economy, Trade and Industry showed
that Japan's all industry activity growth halved in December.
The all industry activity index rose 0.5 percent month-on-month
in December, following November's 1 percent increase. Nonetheless,
this was the third consecutive increase in activity and bigger than
the expected 0.4 percent rise.
The loonie weakened to near a 2-week low of 1.2670 against the
greenback and held steady thereafter. The pair ended Tuesday's
trading at 1.2645.
The loonie fell back to 1.5612 against the euro, a pip short of
its Asian session's 5-day low of 1.5613. On the downside, 1.58 is
likely seen as the next support for the loonie.
Flash data from IHS Markit showed that Eurozone private sector
growth continued to rise at a steep pace in February, albeit with
the rate of expansion cooling from the near 12-year high in
January.
The composite output index dropped to 57.5 from 58.8 in the
previous month. The score was forecast to fall to 58.4.
On the flip side, the loonie held steady against the aussie,
after having recovered from a 3-week low of 0.9989 set at 7:30 pm
ET. The pair was valued at 0.9966 when it closed deals on
Tuesday.
Looking ahead, Markit's U.S. manufacturing PMI for February and
existing home sales for January are scheduled for release in the
New York session.
The Bank of England Governor Mark Carney, Deputy Governor Ben
Broadbent and policy makers Andy Haldane and Silvana Tenreyro will
testify on inflation and the economic outlook before the Treasury
Select Committee at 9:15 am ET.
At 2:00 pm ET, the Fed minutes from January 30-31 meeting are
due.
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