Canadian Dollar Falls Amid Sliding Oil Prices
February 05 2018 - 3:29AM
RTTF2
The Canadian dollar dropped against its major opponents in the
European session on Monday, as oil prices fell on rising drilling
activity in the U.S.
Crude for March delivery fell $0.65 to $64.80 per barrel.
Data from energy services firm Baker Hughes showed that U.S. rig
count rose by six to 765 in the week to February 2.
Further undermining the currency was risk aversion, as investors
fretted about higher U.S. rates following better-than-expected jobs
data.
Investors focused on coalition talks in Germany, where
Chancellor Angela Merkel's Conservatives and the Social Democrats
failed to meet a self-imposed deadline to forge a new government by
Sunday. Differences about health care and labor policy are yet to
be resolved between the two sides.
Negotiations are set to resume today.
The currency has been trading in a negative territory in the
Asian session, with the exception of the euro.
The loonie fell back to 1.2445 against the greenback, heading to
pierce its early near a 2-week low of 1.2450. If the loonie falls
further, it may target support around the 1.26 area.
The loonie slipped to a 5-day low of 88.14 against the yen,
compared to 88.63 hit late New York Friday. The loonie is seen
finding support around the 86.00 level.
Survey by IHS Markit showed that Japan's service sector activity
expanded at a slightly faster pace in January.
The seasonally adjusted services purchasing managers' index, or
PMI, rose to 51.9 in January from 51.1 in December.
The loonie that closed Friday's deals at 0.9839 against the
aussie dropped to a 4-day low of 0.9873. The next possible support
for the loonie is seen around the 1.00 level.
The loonie weakened to 1.5491 against the euro, a level unseen
since February 2016. The loonie is likely to challenge support
around the 1.56 region.
Final data from IHS Markit showed that the euro area economy
expanded at the fastest pace pace since mid-2006 in January.
The final composite output index rose more than initially
estimated to 58.8 in January from 58.1 in December. The flash score
was 58.6.
Looking ahead, U.S. ISM non-manufacturing composite index for
January is set for release in the New York session.
At 11:00 am ET, the European Central Bank President Mario Draghi
will testify on the ECB's Annual Report for 2016 before the
European Parliament in Strasbourg.
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