Canadian Dollar Drops Amid Falling Oil Prices; BoC Decision Due
January 18 2017 - 2:49AM
RTTF2
The Canadian dollar drifted lower against its major counterparts
in the European session on Wednesday, as oil prices declined on
worries over the likelihood of growing U.S. shale oil production,
while investors awaited the Bank of Canada's monetary policy
decision later in the day.
Crude for February delivery fell $0.74 to $51.74 per barrel.
The U.S. shale output is expected to increase by 41,000 barrels
per day to 4.748 million barrels per day in February, the Energy
Information Administration said in the Drilling Productivity Report
on Tuesday.
The highest rise in shale output is expected in the country's
Permian region, where the production is forecast to rise by 53,000
to 2.180 million barrels per day.
The Bank of Canada announces its monetary policy decision at
10:00 am ET, with economists expecting it to retain interest rates
at 0.50 percent. The benchmark rate has been kept unchanged since
July 2016.
The BoC governor Stephen Poloz and deputy governor Carolyn
Wilkins will hold press conference at 11:15 am ET, with investors
awaiting cues on future policy.
European markets are trading mixed, as investors digested a slew
of company updates and awaited the inauguration of Donald Trump as
U.S. President on Friday.
The loonie showed mixed performance in the Asian session. While
the currency rose against the euro and the yen, it declined against
the greenback. Against the aussie, it held steady.
The loonie fell to 0.9906 against the aussie, its weakest since
December 8. On the downside, 1.01 is possibly seen as the next
support level for the loonie.
The latest survey from Westpac Bank showed that Australia's
consumer confidence inched slightly higher in January, rising 0.1
percent on month to a score of 97.4.
That follows the 3.9 percent contraction in December to a score
of 97.3.
Reversing from an early high of 1.3955 versus the euro, the
loonie dropped to a 5-day low of 1.4006. Continuation of the
loonie's downtrend may see it challenging support around the 1.43
mark.
Final data from Eurostat showed Eurozone inflation climbed as
initially estimated in December.
Inflation rose to 1.1 percent in December from 0.6 percent in
November.
The loonie pared gains to 86.46 against the Japanese yen, from a
high of 86.77 hit at 3:45 am ET. The loonie is seen finding support
around the 85.00 region.
The loonie reached as low as 1.3112 against the greenback, down
from a high of 1.3038 hit 5:00 pm ET. Further downtrend may take
the loonie to a support around the 1.34 region.
Looking ahead, U.S. NAHB house price index for January, U.S. CPI
for December and industrial production for December are slated for
release in the New York session.
At 9:00 am ET, Federal Reserve Bank of Dallas President Robert
Kaplan will participate in a panel before the University of Texas
at Austin 2017 Business Forecast, in Dallas.
At 11:00 am ET, Federal Reserve Bank of Minneapolis President
Neel Kashkari is expected to speak about the economy at the
Minneapolis Urban League, in Minneapolis.
At 2:00 pm ET, Federal Reserve's Beige book report is set to be
published.
At 3:00 pm ET, Federal Reserve Chair Janet Yellen will deliver a
speech titled "The Goals of Monetary Policy and How We Pursue Them"
at the Commonwealth Club, in San Francisco.
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