The Canadian dollar strengthened against its major rivals Wednesday in early European trading as crude oil price edged slightly higher in Asian trading, boosted by a weaker dollar and stronger Asian equities. Investors await the U.S. oil inventory report that due out later today.
Light, sweet crude for May delivery traded at $84.42 per barrel at 4:00 am ET, up 37 cents or 0.44 percent on the New York Mercantile Exchange. May Brent crude on London’s ICE Futures exchange rose $0.19 to $84.91 a barrel.
Asian stock markets are mostly up with the overnight positive close on Wall Street and optimism about the global economy prompting investors to pick up stocks from across various sectors. Strong results and upbeat guidance from technology bellwether Intel Corp. too are contributing to the positive mood.
Further, Asian stocks made clear gains after Singapore’s central bank recentered its dollar policy band upwards and switched to a policy of modest and gradual appreciation for the currency.
Crude stockpiles in the United States rose in line with expectations by 1.4 million barrels in the week to April 9, the American Petroleum Institute (API) said yesterday, while gasoline stocks increased 1.6 million barrels and distillates including heating oil and diesel climbed by a larger-than-expected 1.7 million barrels.
The Canadian dollar climbed to a 1-week high of 0.9984 against the US dollar by 4:00 am ET and is moving closer to breach the 0.9980 resistance, which could set its strongest level in 21 months. The greenback-loonie pair is presently quoted at 0.9985, compared to 1.0013 hit late New York Tuesday.
Also, the Federal Reserve Chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee at 10:00 am ET.
The Energy Information Administration (EIA) will release its crude inventories report at 10:30 am ET.
The Federal Reserve will release its Beige Book at 2:00 pm ET.
Against the yen, the Canadian dollar is currently trading at a 5-day high of 93.69 and rising above its April 7th high of 94.34 could set its highest level in more than 18 months. The loonie-yen pair closed yesterday’s deals at 93.14.
The Canadian dollar advanced to 1.3606 against the euro by 4:00 am ET and this may be compared to yesterday’s close of 1.3628. The loonie-yen pair is presently worth 1.3617 with 1.3530 seen as the next target level.
Looking ahead, the euro-zone industrial production data for February is slated for release at 5:00 am ET. Economists forecast industrial production to rise by 0.1% on a monthly basis and by 2.8% on a yearly basis.
Turning to the U.S., retail sales and consumer price data-both for March are expected to influence markets today.
Inflation is expected to remain well contained as housing costs continue to weigh on the overall index, giving the Federal Reserve plenty of room to keep interest rates low.