The Canadian dollar erased some of its Asian session’s gains against major currencies in early trading on Monday. The loonie thus eased from a new multi-year high against the US dollar.
Reflecting the precarious situation in the MENA region, crude oil is trading at mid $108-a-barrel level after rising over 2 percent in the previous week.
The Canadian dollar that jumped to a new multi-year high of 0.9618 against the US dollar in the Asian session pulled back to as low as 0.9648 before leveling off around 7:00 am ET. If the Canadian dollar weakens further, 0.9660 is seen as the next likely target level.
The Canadian dollar is presently trading at 1.3707 against the euro, down by more than 30 pips from its previous high of 1.3676. The pair closed last week’s deals at 1.3722.
The euro recovered losses it incurred in the Asian session after a report published by Eurostat revealed that the eurozone producer price inflation accelerated to 6.6 percent on a yearly basis in February. Economists were expecting producer prices to rise at a pace of 6.7 percent after increasing 5.9 percent in January.
At the same time, the industrial producer price index rose at a slower pace of 0.8 percent month-on-month in February, following January’s 1.3 percent growth. Monthly inflation matched economists’ expectations.
The Canadian currency also declined to a low of 87.10 against the Japanese yen before lacking a clear direction around 5:20 am ET. The loonie-yen pair is presently worth near Friday’s close of 87.19. On the downside, 86.40 is seen as the next likely support level for the Canadian currency.
Large Japanese manufacturers expect business conditions to deteriorate in the next three months, a post-quake survey by Bank of Japan showed today. Nonetheless, mood among enterprise remained upbeat in the March quarter, indicating that the last month’s devastating earthquake had little impact on their sentiment levels.
The indicator measuring Japanese manufacturers’ view of the operating conditions in the next quarter fell to minus 2 from 6 in the first quarter, a second batch of results from BoJ’s Tankan survey showed. In the December quarter, the indicator was at 5.
