Canadian Dollar Higher As Oil Prices Strengthen On China Stimulus Hopes
June 11 2019 - 04:24AM
RTTF2
The Canadian dollar appreciated against its major counterparts
during the European session on Tuesday, as oil prices rose amid
hopes of more stimulus for China's slowing economy.
Sentiment improved after Beijing said it would allow local
governments to use proceeds from special bonds as capital for major
projects including highways, gas and power supply and railways.
Expectations that OPEC and its allies will keep ongoing
production cuts for a longer period also underpinned crude
prices.
OPEC is currently scheduled to meet in Vienna on June 25 to
decide output policy for the rest of the year. With the current
output deal expiring in June, it is likely that the OPEC will
extend the production cut till end of the year.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the aussie and the yen, it
held steady against the greenback and the euro.
The loonie climbed to 82.04 against the yen, its strongest since
May 23. The next possible resistance for the loonie is seen around
the 83.5 level.
Data from the Bank of Japan showed that the M2 money stock in
Japan was up 2.7 percent on year in May, coming in at 1,029.8
trillion yen. That follows the downwardly revised 2.5 percent
increase in April.
The M3 money stock advanced an annual 2.3 percent to 1,361.7
trillion yen following the 2.2 percent gain in the previous
month.
The loonie that closed yesterday's trading at 1.3269 against the
greenback advanced to 1.3251. The loonie may test resistance around
the 1.30 level, if it rises again.
The loonie edged higher to 1.4986 against the euro, compared to
yesterday's closing value of 1.5008. Next key resistance for the
loonie is seen around the 1.48 region.
Survey data from the behavioral research institute Sentix showed
that Eurozone investor confidence eroded sharply in June as a
renewed escalation in trade tensions between the US and China hurt
sentiment in the single currency bloc.
The investor confidence index for the euro area fell by 8 points
to -3.3 from +5.3 in May. Economists had expected a score of
+2.5.
The Canadian currency remained higher at 0.9216 against the
aussie, after having advanced to nearly a 3-week high of 0.9215 at
1:30 am ET. The currency is seen finding resistance around the 0.91
region.
Looking ahead, the U.S. producer prices for May are due in the
New York session.
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