The Canadian dollar drifted higher against most major currencies in early European deals on Monday, as oil prices advanced following China’s stimulus measures, aimed to boost lending.
Crude for June delivery rose $0.44 to $57.76 a barrel.
On Sunday, the People’s Bank of China lowered the banks’ reserve requirement ratio to 18.5 percent, to inject more liquidity into the financial system. This was the second reduction this year, an action taken after the economy logged its weakest growth in six years
Continued decline in U.S. rig counts also supported oil prices. Data from Baker Hughes showed Friday that the number of oil rigs fell 26 to 734 in the latest week. The collapse in rig counts is seen as an indication of reduction of glut of crude flowing into the market.
European markets are trading mixed, as concerns about Greece debt default overshadowed optimism over China stimulus move.
In the previous session, the loonie was moderately higher against its major counterparts, except against the yen.
The loonie edged up to 1.3104 against the euro and 0.9493 against the aussie, off early low of 1.3225 and a 4-day low of 0.9555, respectively. The next possible resistance for the loonie is seen around 1.30 against the euro and 0.925 against the aussie.
The loonie recovered to 97.40 against the yen, after falling to 97.19 at 3:00 am ET. If the loonie extends rise, 99.00 is seen as its next resistance level.
On the flip side, the loonie eased back to 1.2205 against the greenback, from an early high of 1.2180. At Friday’s close, the pair was quoted at 1.2234.
Looking ahead, Bank of Canada Governor Stephen Poloz will participate in a panel discussion at the Bloomberg Americas Monetary Summit, in New York at 10:05 am ET.
The material has been provided by InstaForex Company – www.instaforex.com