The Canadian dollar strengthened against the other major currencies in the Asian session on Wednesday following positive cues from Wall Street overnight, weakness in the U.S. dollar and as crude oil prices staged a recovery.
Crude oil for February delivery are currently up $0.18 to $36.32 a barrel. Oil prices inched higher Tuesday, staying away from multi-year lows as U.S. oil briefly traded at parity with Brent crude.
A report by industry group the American Petroleum Institute showed that U.S. crude inventories fell by 3.6 million barrels in the week to 486.7 million. The economists had expected an increase of 1.1 million barrels.
Meanwhile, the U.S. Commerce Department reported a slight downward revision to third quarter economic growth. The report said real gross domestic product increased by 2.0 percent in the third quarter compared to the previously estimated 2.1 percent growth.
Another report, released by the National Association of Realtors, on Tuesday showed that existing home sales in the U.S. fell by much more than anticipated in the month of November, with sales plunging to their lowest level in well over a year. Existing home sales tumbled 10.5 percent to an annual rate of 4.76 million in November from a downwardly revised 5.32 million in October.
Tuesday, the Canadian dollar showed mixed performance against its major rivals. While the Canadian dollar fell against the euro and the Australian dollar, it held steady against the U.S. dollar and the yen.
In the Asian trading, the Canadian dollar rose to a 5-day high of 1.3911 against the U.S. dollar, from yesterday’s closing value of 1.3919. The loonie is likely to find resistance around the 1.37 region.
Against the yen, the euro and the Australian dollar, the loonie edged up to 87.01, 1.5214 and 1.0056 from yesterday’s closing quotes of 86.96, 1.5249 and 1.0070, respectively. If the loonie extends its uptrend, it is likely to find resistance around 88.50 against the yen, 1.50 against the euro and 0.99 against the Australian dollar.
Looking ahead, Swiss KOF leading indicator for December, the third estimate U.K. GDP data for the third quarter and U.K. index of services for October are due to be released later in the day.
In the New York session, the preliminary U.S. durable goods orders, U.S. personal income and spending data for November and new home sales data, all for November, U.S. University of Michigan’s final consumer sentiment index for December and U.S. crude oil inventories data, Canada GDP data and retail sales data, both for October, are slated for release.
The markets in Japan are closed in observance of the Emperor’s Birthday holiday.
The material has been provided by InstaForex Company – www.instaforex.com