The Canadian dollar gained ground against its most major rivals in European deals on Tuesday, as European stocks rallied, following yesterday’s China-led global rout, amid strong corporate earning results and M&A activities.
In order to counter major sell-off, China’s central bank said it would continue to inject funds into the stock markets, while regulators pledged to continue their share purchases.
The People’s Bank of China said it would inject 50 billion yuan into the money markets via open-market operations in its biggest liquidity injection since July 7. The central bank also hinted at further monetary easing using “various monetary tools” to help ease fears about the impact of stock market volatility on the broader economy.
Traders await data on U.S. home prices and consumer confidence, as well as the Federal Reserve’s 2-day policy meeting beginning later in the day. While economists do not expect an immediate rate hike, investors are hoping that the language of the policy statement could provide further clues about how close officials believe they are getting to raise rates.
The loonie has been trading higher against its major rivals, except the aussie, in the previous session.
In European deals, the loonie advanced to a 4-day high of 95.17 versus the yen, off early 4-month low of 94.36. The loonie-yen pair may locate resistance around the 96.00 mark. At yesterday’s close, the pair was valued at 94.51.
The loonie edged up to 1.2996 against the greenback and 1.4353 against the euro, coming off from its previous lows of 1.3042 and 1.4463,respectively. If the loonie continues its uptrend, it is likely to find resistance around 1.29 against the greenback and 1.43 against the euro. The loonie ended Monday’s trading at 1.3036 against the greenback and 1.4452 against the euro.
Meanwhile, the loonie held steady against the aussie in European trading, following a 4-day decline to 0.9527 at 1:00 am ET. The pair was quoted at 0.9472 at yesterday’s close.
Looking ahead, Canada industrial product and raw materials price indices for June and U.S. S&P/Case-Shiller home price index for May, Markit’s preliminary U.S. service sector PMI report for July and U.S. consumer confidence for July are slated for release in the New York session.
The material has been provided by InstaForex Company – www.instaforex.com