Canadian Dollar Climbs On Higher Oil Prices

The Canadian dollar advanced against its major rivals in early New York deals on Tuesday, erasing early losses, as oil prices rallied ahead of the release of U.S. oil inventories data.

Crude for February delivery rose $0.33 to $37.10 a barrel.

The American Petroleum Institute is due to release its crude inventories data later in the day, while the Energy Information Administration will publish official inventories data tomorrow.

Sentiment was underpinned by signs of stability in Chinese shares after a 2.6 percent plunge on Monday. Investor confidence was bolstered after lawmakers approved a proposal to reform stock listings and the People’s Bank of China said it would “flexibly” use various policy tools to maintain appropriate liquidity and keep the yuan stable.

Meanwhile, Saudi Arabia on Monday unveiled plan to cut government spending and raise taxes, after plunging oil prices resulted in a record annual budget deficit of about $98 billion in 2015.

The kingdom’s 2016 budget is allegedly based on crude prices of about $29 a barrel, Bloomberg reported, signaling that the nation is planning to adhere to its policy of keeping oil production unchanged.

The loonie showed mixed performance in European deals. While the loonie held steady against the yen, it fell against the aussie. Against the euro and the greenback, it edged higher.

In early New York trading now, the loonie was trading higher at 86.88 against the yen, off its early 8-day low of 86.38. If the loonie extends rise, 88.00 is possibly seen as its next resistance level.

Reversing from an early weekly low of 1.5296 versus the euro, the loonie edged higher to 1.5146. The loonie is likely to find resistance around the 1.50 region.

Data from Destatis showed that Germany’s core and extra budgets of overall public budget showed a financial surplus of EUR 3.9 billion in the first three quarters of 2015.

In the same period of last year, the overall public budget showed a cash deficit of EUR 20.8 billion.

The loonie that fell a weekly low of 1.3940 against the greenback and more than a 15-month low of 1.0136 against the aussie recovered to 1.3861 and 1.0095, respectively. The loonie may challenge resistance around 1.36 against the greenback and 1.00 against the aussie.

Looking ahead, U.S. consumer confidence index for December is due to be released shortly.

The material has been provided by InstaForex Company – www.instaforex.com

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