Canadian Dollar Climbs On Rising Oil Prices
July 28 2021 - 6:44AM
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The Canadian dollar rose against its most major counterparts in
the European session on Wednesday amid higher oil prices, as
investors awaited U.S. Energy Information Administration's data
that is expected to show a drop in stockpiles last week.
Economists expect crude inventories to fall by 2.928 million
barrels for the week ended July 23, compared to a build of 2.108
million barrels in the previous week.
Further underpinning oil prices were the American Petroleum
Institute's data showing a bigger than expected drop in U.S. crude
inventories last week.
Data from the API showed that U.S. crude stocks fell by 4.7
million barrels for the week ended July 23, compared to analysts'
expectations for a 2.9 million drop.
The Fed meeting will be in focus as markets await clues on the
central bank's QE tapering plans amid rising inflation.
Data from Statistics Canada showed that inflation rose 0.1
percent on a seasonally adjusted monthly basis in June, after a
gain of 0.4 percent in the previous month.
Core CPI, excluding food and energy, fell 0.1 percent, after
rising 0.4 percent in May.
The loonie rose to 1.4826 against the euro and 87.64 against the
yen, off its early low of 1.4895 and a 1-week low of 87.05,
respectively. The loonie is seen finding resistance around 1.47
against the euro and 89.00 against the yen.
The loonie appreciated to more than a 1-year high of 0.9216
against the aussie, from an early 5-day low of 0.9279. If the
loonie rises further, it may find resistance around the 0.90
level.
In contrast, the loonie pulled back to 1.2602 against the
greenback, from a high of 1.2560 seen at 5:15 am ET. On the
downside, 1.28 is possibly seen as its next support level.
Looking ahead, the Fed announces its decision on interest rate
at 2:00 pm ET. Economists widely expect the federal funds rate to
be kept at 0-0.25 percent.
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