Canadian Dollar Strengthens To New Multi-Day Highs Against Majors
Tuesday during early deals, the Canadian dollar strengthened to new multi-day highs against its European, US, Australian and Japanese counterparts as crude oil prices rose toward $69 a barrel, snapping two-days of fall.
U.S. light crude for July delivery rose 93 cents to $69.02 a barrel by 4:55 am ET, just off a session high of $69.37. London Brent crude gained 94 cents to $68.82.
The Canadian dollar edged up to a 6-day high against the Aussie, an 8-day high against the euro and a 4-day high against the yen and the dollar. The Canadian currency appreciated 9% against the greenback, 2.4% against the euro and 5% against the yen in May, as stocks advanced and commodities rallied, led by energy, as the slumping greenback boosted demand for raw materials as a hedge against inflation. Raw materials account for more than half of Canada's export revenue.
During early deals on Monday, the Canadian dollar jumped to 1.1083 against the U.S. currency. This set a 4-day high for the loonie. On the upside, 1.079 is seen as the next target level for the Canadian dollar. The greenback-loonie pair was worth 1.1161 at Monday's close.
Canada's currency, called the loonie, depreciated 3% against the U.S. dollar in the first quarter of 2009, which ended on March 31, compared to a 13% loss in the fourth quarter of 2008 ending December 31.
But the Canadian dollar is showing strength since the beginning of second quarter this year as the crude oil prices rebounded and investors stepped out of havens into higher-yielding assets such as stocks amid signs the global economic slump is moderating. Thus far, the loonie has appreciated 17% against the greenback.
The Canadian dollar, which closed Monday's trading at 88.31 against the yen rose to a 4-day high of 88.65 during early deals on Tuesday. The next upside target for the loonie-yen pair is seen at the 91.0 level.
After hitting a new multi-year low of 68.44 against the yen on January 21, the Canadian dollar rebounded and extended its uptrend in the subsequent months. Since then, the loonie-yen pair advanced 23% to hit a new multi-month high of 89.20 on June 03.
The Canadian dollar rose to a 6-day high of 1.5412 against the euro in early deals on Tuesday. This may be compared to Monday's close of 0.8811. If the Canadian dollar climbs further, it may likely target the 0.872 level.
The Federal Statistical Office said Germany's trade surplus declined to EUR 9.4 billion in April from EUR 11.3 billion in the previous month. The surplus stood above the expected level of EUR 9.3 billion. Upon calendar and seasonal adjustment, the foreign trade surplus totaled EUR 9 billion.
According to provisional results of the Deutsche Bundesbank, the current account balance showed a surplus of EUR 5.8 billion in April, much smaller than the EUR 15.4 billion in April 2008.
The Canadian dollar that was worth 0.8811 against the Aussie at yesterday's New York session close, rose to a 5-day high of 0.8787 by about 5:20 am ET Tuesday. If the loonie climbs further, 0.872 is seen as the next upside target level.
News are provided by InstaForex.