Canadian Dollar Climbs On Risk Appetite

08:05, 18th September 2014

(RTTNews) - The Canadian dollar firmed against its major counterparts in European deals on Thursday, as European stocks edged higher following the U.S. Federal Reserve's stance to keep its accommodative policy for a "considerable time," with traders focusing on Scottish referendum that is underway.

The Fed on Wednesday reiterated its pledge to keep interest rates low for a "considerable time" as well as its assessment that "there remains significant underutilization of labor resources."

The Fed also announced its widely anticipated decision to scale back its asset purchase program by another $10 billion to just $15 billion per month. The Fed also projected a faster pace of rate increases, when it start raising rates next year.

More than 4 million people have registered to vote in today's referendum in Scotland on whether to end their country's 307-year-old union with Britain.

Although opinion polls suggest that the race is too close to call, recent survey results had shown the pro-Union "No" side a slight lead.

The weekly official oil report from the U.S. Energy Information Administration on Wednesday showed crude stockpiles in the U.S. to have increased more than expected. The EIA said that crude oil stockpiles increased by 3.7 million barrels to 362.3 million barrels in the week ended September 12. Analysts had predicted a decrease of 1.5 million barrels.

The loonie firmed to 98.99 against the yen, a level not seen this year. On the upside, 100.00 is seen as the next resistance level for the loonie.

Japan posted a merchandise trade deficit of 948.5 billion yen in August, the Ministry of Finance said - remaining in the red for a record 26th consecutive month.

The headline figure beat forecasts for a shortfall of 1,028.9 billion yen following the 962.1 billion yen deficit in July.

The loonie advanced to a weekly high of 1.4135 against the euro, off early low of 1.4188. The next possible resistance for the loonie is seen around the 1.40 region.

The European Central Bank announced the results of its first targeted longer term refinancing operation, or TLTRO, which is aimed to boost liquidity at Eurozone banks to help revive lending to small businesses and households.

The central bank announced that 255 bidders were allotted EUR 82.60 billion, which was below the EUR 100 - EUR 150 billion predicted by analysts.

The loonie held steady against the aussie, after strengthening to more than a 6-month high of 0.9835 in early deals. If the loonie extends rise, it may likely find resistance around the 0.975 zone.

The loonie showed a modest rebound against the greenback with pair trading at 1.0983, up from an early 2-day low of 1.1022. At yesterday's close, the pair was worth 1.0993.

Looking ahead, the U.S. building permits and housing starts for August and U.S. weekly jobless claims for the week ended September 13 are due to be released in the New York session.