Canadian Dollar Trades At Fresh Multi-week Highs Against Greenback
The Canadian dollar extended its previous session’s rally in early New York trading on Monday as crude oil prices remained firmer above $78 per barrel. The loonie rose to a fresh multi-week high against the US dollar and approaching last week’s 2-month high versus the yen.
The oil headed toward $80 a barrel today as better employment figures in the US last week helped to lift hopes of economic recovery and raised expectations of stronger consumer spending. The colder weather across the U.S. also added to the increased demand for the oil.
Crude for February delivery rose 81 cents to $78.86 a barrel by 9:53 am ET, after touching as high as $79.12 earlier. Trading in crude was closed on Friday for Christmas Day.
Bouncing back from its Asian session’s 4-day low, the Canadian dollar touched 1.0448 against the greenback by 8:50 am ET. This set the lowest level for the loonie since December 4. On the upside, the domestic dollar may find target around the 1.041 level.
There is no first-tier economic data to consider from the US today, leaving traders to ponder the results of the S&P Case-Shiller’s house price survey for October and the Conference Board’s consumer confidence index for December, which will be released on Tuesday.
Hovering near last week’s fresh 8-week high, the Canadian dollar advanced to 87.67 against the Japanese yen around 9:40 am ET and the pair moved sideways thereafter. The loonie-yen pair is presently trading at 87.64 and moving a few pips up may push the pair to fetch its highest level since late October. In the longer-term, resistance is likely seen around the 88.4 level.
Earlier in the Asian session, a government report said that retail sales in Japan declined 1.0 percent on year in November, declining for the 15th consecutive month to come in at 11.039 trillion yen.
Another report stated that industrial production in Japan was up 2.6 percent in November compared to the previous month, posting a seasonally adjusted index score of 88.3 and rising for the ninth consecutive month.
Bouncing back from its early European session’s downtrend, the Canadian dollar climbed to 1.5047 against the euro before leveling off around 8:50 am ET. The domestic unit is presently trading at 1.5056 against the single currency with 1.504 seen as the next near-term target level.
All 16 members of the Eurozone must reduce their budget deficits by 2011 at the latest in order to maintain confidence in public finances, European Central Bank President Jean-Claude Trichet told German newspaper Bild am Sonntag on Sunday.
Trichet urged banks to increase lending to ease credit crunch. “Banks must live up to their central role in providing credit to the economy,” he said.
The central banker said the Eurozone economy’s gradual recovery in 2010 will depend on the joint effort of all sectors of the economy.
