Canadian Dollar Declines On Falling Oil Prices
September 29 2016 - 11:48PM
RTTF2
The Canadian dollar drifted lower against its major counterparts
in pre-European deals on Friday, as oil prices declined amid
skepticism over whether the OPEC deal agreeing for modest
production cuts would address massive supply glut.
Crude for November delivery declined $0.46 to $47.37 per
barrel.
The OPEC deal, aiming to hold output between 32.5 million and 33
million barrels a day, is expected to be finalized on November 30.
But, with OPEC production near record high, traders have doubts
over whether the planned output cut would make a significant dent
in global oil glut.
The deal lack too many details, including the quota of oil
production cut among member nations, which should be finalized at a
formal OPEC meeting in November.
Meanwhile, Asian shares declined on rising worries about the
financial health of German lender Deutsche Bank.
Bloomberg reported Thursday that several hedge funds have
withdrawn excess cash and positions held at Deutsche Bank. Europe's
largest investment bank has been under pressure after the U.S.
Justice Department asked it to pay a $14 billion fine to settle
civil claims related to its residential mortgage-backed
securities.
The loonie showed mixed trading in the Asian session. While the
loonie rose against the aussie and the yen, it was modestly lower
against the euro and the greenback.
The loonie that ended yesterday's trading at 1.4749 against the
euro dropped to a 2-day low of 1.4780. Continuation of the loonie's
downtrend may see it challenging support around the 1.50 zone.
Data from Destatis showed that Germany's retail sales decreased
at a faster-than-expected pace in August, after rising in the
previous month.
Retail sales fell a calendar and seasonally-adjusted 0.4 percent
month-over-month in August, exceeding economists' expectations for
a 0.2 percent drop.
The loonie weakened to a 2-day low of 1.3195 against the
greenback, down from Thursday's closing value of 1.3145. If the
loonie extends slide, 1.33 is possibly seen as its next support
level.
Pulling away from an early high of 77.35 against the Japanese
yen, the loonie fell to a 2-day low of 76.37. The loonie is seen
finding support around the 75.00 mark.
Data from the Ministry of Land, Infrastructure, Transport and
Tourism showed that Japan's housing starts grew for the second
straight month in August, though at a slower-than-expected
pace.
Housing starts rose 2.5 percent year-over-year in August, much
slower than July's 8.9 percent spike. That was also well below the
7.1 percent rise expected by economists.
Meanwhile, the loonie firmed to a 4-day high of 1.0012 against
the aussie, compared to yesterday's closing value of 1.0033. On the
upside, the loonie is likely to target resistance around the 0.98
region.
Data from the Reserve Bank of Australia showed that Australia's
private sector credit grew 0.4 percent on month in August.
That was unchanged from the July reading, although it missed
forecasts for 0.5 percent.
Looking ahead, Eurozone unemployment rate for August and CPI
data for September are slated for release shortly.
In the New York session, Canada GDP data for August, Canada
industrial and raw materials products price indexes for August,
U.S. personal income and spending data for August, U.S. University
of Michigan final consumer sentiment index for September, U.S.
Chicago purchasing manager index for September and U.S. Baker
Hughes rig count data are set to be announced.
At 1:00 pm ET, Federal Reserve Bank of Dallas President Robert
Kaplan will participate in a moderated Q&A session before the
Stemmons Corridor Business Association 35th Annual Meeting, in
Dallas, United States.
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