Canadian Dollar Weakens On Falling Oil Prices

04:21, 23rd January 2017

(RTTNews) - The Canadian dollar slipped against its major counterparts in the European session on Monday, as oil prices declined on speculation that U.S. production will surge in 2017.

Crude for March delivery fell $0.73 to $52.49 per barrel.

U.S. energy companies last week added the most oil rigs in nearly four years, Baker Hughes said Friday.

Data from energy services firm showed that the US oil-rig count increased by 29 to 551 last week. The data raised worries over the possibility of higher oil production in the U.S., which could derail attempts by the other major oil producers to stabilize oil market.

Sentiment was dampened on worries over the U.S. president Donald Trump's adoption of protectionist stance over the weekend, vowing the renegotiate NAFTA.

Trump said he has scheduled meetings with Mexican President Enrique Pena Nieto and Canadian Prime Minister Justin Trudeau to start reworking the trade deal.

"We're going to start renegotiating on NAFTA, on immigration and on security at the border," Trump said at the start of a swearing-in ceremony for top White House staff on Sunday. "I think we're going to have a very good result for Mexico, for the United States, for everybody involved. It's really very important." Data from Statistics Canada showed that Canadian wholesale sales grew a seasonally adjusted 0.2 percent on month in November.

This is slightly slower than the expected 0.3 percent growth and follows a 1.3 percent surge in October.

The loonie showed mixed performance in the Asian session. While the loonie rose against the aussie and the greenback, it held steady against the euro. Against the yen, it dropped.

The loonie declined to 85.12 against the yen, its lowest since December 5. The loonie-yen pair is likely to find support around the 84.00 mark.

Figures from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity increased at a slower-than-expected pace in November.

The all industry activity index rose a seasonally adjusted 0.3 percent month-over-month in November, after remaining flat in the previous month. That was just below the 0.4 percent gain expected by economists.

The loonie retreated to 1.3320 against the greenback and 1.0090 against the aussie, from its early 4-day highs of 1.3268 and 1.0027, respectively. Continuation of the loonie's downtrend may see it challenging support around 1.34 versus the greenback and 1.02 versus the aussie.

The loonie resumed its decline versus the euro, falling to nearly 4-week low of 1.4294. Further downtrend may take the loonie to a support around the 1.44 region.

Looking ahead, at 10:00 am ET, Eurozone consumer confidence for January is slated for release.