The Canadian dollar strengthened against major currencies in the Asian trading session on Wednesday, driven by a rise in crude oil prices. Traders are optimistic that China will announce new stimulus measures to boost its economy, the world’s second-largest. This comes amid positive U.S. economic data, including a rebound in new home sales and an increase in core capital goods orders for November.
West Texas Intermediate (WTI) crude oil futures for February ended the day up by $0.86, or 1.25%, settling at $70.10 per barrel. Meanwhile, Brent crude futures gained $0.95, or 1.3%, to close at $73.58 per barrel.
On Tuesday, China’s Finance Ministry revealed plans to increase public spending next year, with a focus on stimulating domestic demand.
Other factors supporting oil prices include concerns over potential supply disruptions due to ongoing geopolitical tensions, as well as a temporary spending bill passed by the U.S. Senate to avoid a government shutdown. Additionally, Kazakhstan’s decision to delay its plans to raise oil production by 190,000 barrels per day next year further supported the upward momentum in oil prices.
During the Asian session, the Canadian dollar (loonie) hit a 4.5-month high of 0.8943 against the Australian dollar, up from 0.8955 at the previous close. The loonie may face resistance around the 0.87 mark.
Against the U.S. dollar, the Canadian dollar strengthened to 1.4348, compared to 1.4360 on Tuesday. The next key resistance level for the loonie is seen at 1.42.
The Canadian dollar also gained against the euro and the yen, rising to 1.4932 and 109.58, respectively, from early lows of 1.4965 and 109.42. The next potential upside targets for the loonie are around 1.48 against the euro and 111.00 against the yen.
With many markets closed for the Christmas holiday, trading activity was relatively light.
Related Topics:
- Canada’s Economy Grows Stronger Thanks to Oil and Gas Extraction
- Crude Oil Futures Increase After US Avoids Government Shutdown
- Oil Price Forecast for 2025 – WTI Oil Set to Test the $60 Mark