The Canadian dollar came off from its early lows against most major rivals in European deals on Thursday, as the nation’s trade deficit narrowed sharply in February.

Data from Statistics Canada showed that Canada’s merchandise trade deficit narrowed to C$984 million in February from a revised C$1.5 billion in January. The shortfall was also lesser than economists forecasts of C$1.80 billion.

Canada’s imports declined 0.7 percent in February, while exports were up 0.4 percent.

The loonie ended Wednesday’s trading higher against its major rivals. The loonie has been lower in recent deals as oil prices declined amid ongoing negotiations between Iran and West about nuclear deal.

The talks stretched beyond the March 31 deadline, and a successful outcome would lift sanctions on Iranian oil exports. Oil was weighed by the prospectus of more Iranian crude to the market that is already oversupplied.

The loonie extended gains to 0.9526 against the aussie, its highest since January 7. If the loonie extends rise, it may find resistance near the 0.945 area.

The loonie bounced to 94.86 against the yen, from an early low of 94.55. Next likely resistance for the loonie may be found around the 96.00 zone.

After declining to a 2-day low of 1.3699 against the euro at 8:15 am ET, the loonie reversed direction with pair trading at 1.3656. The loonie may find resistance around the 1.36 zone.

Meanwhile, the loonie edged down to 1.2655 against the greenback, off early high of 1.2585. The loonie is likely to support around the 1.27 zone.

Looking ahead, U.S. factory orders for February are slated for release shortly.

At 3:45 pm ET, U.S. Federal Reserve Governor Lael Brainard is expected to speak at the Ninth Biennial Federal Reserve System Community Development Research Conference in Washington DC.

The material has been provided by InstaForex Company –