The Canadian dollar strengthened against most major currencies in the Asian session on Tuesday amid crude oil prices rise, after Russia signaled that it want to meet with OPEC and non-OPEC nations to discuss the global oil market situation of year’s big drop in oil prices.
Crude oil for November delivery are currently up $0.09 to $46.35 a barrel.
Investors await the U.S. crude inventories data this week, with API’s report today and EIA’s report tomorrow.
Further speculation that the Federal Reserve will delay raising interest rates until next year, also increased the demand of crude oil prices.
The Institute for Supply Management’s non-manufacturing index came in lower than expected on Monday, making an October rate hike extremely unlikely. The ISM said its non-manufacturing index dropped to 56.9 in September from 59.0 in August, although a reading above 50 indicates growth in the service sector. Economists had expected the index to dip to 58.0.
Taken with Friday’s lackluster jobs report, the Fed might wait until next spring to tighten.
Meanwhile, shares rose following the overnight rally on Wall Street and in the European markets amid renewed hopes that the Federal Reserve will delay raising interest rates. The stability in commodity prices and news that trade ministers from 12 Pacific Rim Countries have signed a new Trans Pacific Partnership trade agreement also boosted risk appetite.
Monday, the Canadian dollar rose, as oil prices climbed amid a weaker dollar, and data showed that the U.S. rig count continued to fall for the fifth consecutive week in the week ended October 2. The Canadian dollar rose 0.49 percent against the U.S. dollar, 0.97 percent against the yen and 0.68 percent against the euro.
In the Asian trading, the Canadian dollar rose to a 5-week high of 92.18 against the yen and nearly a 5-week high of 1.4607 against the euro, from yesterday’s closing quotes of 92.04 and 1.4637, respectively. If the loonie extends its uptrend, it is likely to find resistance around 94.00 against the yen and 1.43 against the euro.
Against the U.S. dollar, the loonie edged up to 1.3070 from an early low of 1.3084. The loonie may test resistance near the 1.29 region.
Meanwhile, the Canadian dollar fell to a 4-day low of 0.9324 against the Australian dollar, from an early near 4-week low of 0.9245. If the loonie extends its downtrend, it is likely to find support around the 0.94 area.
The Canadian dollar was weighed by rising Australian dollar, as the latter rose after after the Reserve Bank of Australia maintained its key interest rate at a record low 2.00 percent, in line with expectations for the fifth straight meeting.
Looking ahead, U.K. Halifax house price index for September, Swiss CPI data, Markit’s German construction PMI and Eurozone retail PMI, all for September, are slated for release in the European session.
At 3:00 am ET, EU Finance Ministers will participate in a meeting of Economic and Financial Affairs Council in Luxembourg.
In the New York session, U.S. and Canada trade balance data, both for August and Canada Ivey PMI for September are set to be published.
At 1:00 pm ET, European Central Bank President Mario Draghi will give a welcome speech at the Art on Site inauguration in Frankfurt.
At 5:30 pm ET, Federal Reserve Bank of San Francisco President John Williams is expected to speak about the US economic outlook at the Urban Land Institute’s Fall Meeting in San Francisco.
The material has been provided by InstaForex Company – www.instaforex.com