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Rising Oil Prices Send Canadian Dollar Higher

Rising Oil Prices Send Canadian Dollar Higher

The Canadian dollar strengthened against its most major counterparts in the European session on Wednesday on higher oil prices, as fears about China’s coronavirus outbreak and the potential economic impact lessened.

Crude for March delivery rose $0.80 to $50.74 per barrel.

The number of new coronavirus cases fell, reducing concerns over demand growth in the world’s second-largest economy.

The National Health Commission said 2,015 new cases had been reported over the last 24 hours, registering a second day of decline.

Risk appetite improved on hopes that China’s coronavirus outbreak would peak soon.

The new outbreak is hitting a peak and may be over by April, Zhong Nanshan, an 83-year-old epidemiologist who won fame for combating the SARS epidemic in 2003, said in an interview with Reuters.

The loonie climbed to 1.4468 against the euro, its strongest in three weeks. On the upside, 1.42 is likely seen as the next resistance for the loonie.

Data from Eurostat showed that Eurozone industrial production decreased more than expected in December.

Industrial production declined 2.1 percent month-on-month in December after staying flat in November. Economists had forecast a 1.7 percent drop.

The loonie rallied the most in nine days against the dollar, touching 1.3259. Should the loonie rises further, 1.30 is seen as its next resistance level.

Breaking the 83.00 level, the loonie jumped to a 2-week high of 83.02 against the yen. The loonie may test resistance around the 84.00 level.

Data from the Bank of Japan showed that Japan M2 money stock rose 2.8 percent on year in January, coming in at 1,042.9 trillion yen.

That exceeded expectations for an increase of 2.7 percent, which would have been unchanged from the December reading.

The loonie, though, slipped to a 6-day low of 0.8954 against its Australian counterpart, as the Asian currency was supported by optimism prevailed in the global markets. Immediate support for the loonie is found around the 0.91 level.

Survey data from Westpac showed that Australia’s consumer confidence advanced in February but sentiment remained weak overall.

The Westpac-Melbourne Institute Index of Consumer Sentiment rose 2.3 percent to 95.5 in February from 93.4 a month ago.

Looking ahead, Federal Reserve Chair Jerome Powell will testify on the Semiannual Monetary Policy Report before the Senate Banking Committee in Washington DC at 10:00 am ET.

In the New York session, U.S. monthly budget statement for January is scheduled for release.

The material has been provided by InstaForex Company – www.instaforex.com