RTTN: Canadian Dollar Climbs As Oil Prices Up On Supply Concerns
(RTTNews) - The Canadian dollar strengthened against its major rivals ahead of the Wall Street opens on Tuesday on the back of a rise in crude oil prices as traders await more information on the impact of Tropical Storm Isaac that has " on average" become a hurricane as it rumbled toward the Gulf Coast.
Light Sweet Crude Oil (WTI) futures for October delivery advanced to $96.38 a barrel, up $0.91 from yesterday's close of $95.47 per barrel.
Yesterday, oil settled lower as worries over supply disruptions eased amid speculation that Tropical Storm Isaac will have little impact on production in the oil-rich Gulf of Mexico.
The storm is expected to bring about wide-spread destruction on low-lying fuel refineries in the Gulf Coast, where 40 percent of the U.S. refining capacity lies, which in turn increase the price of oil further.
Extending its 4-day winning streak, the Canadian dollar climbed to a 1-week high of 0.9874 against the greenback around 8:00 am ET. On the upside, the loonie is expected to re-test the major resistance zone of 0.9840/50 after a gap of a week.
The Canadian currency appreciated almost 0.6 percent to a 6-day high of 79.65 against the yen around 8:00 am ET from Asian session's 4-day low of 79.20. If the loonie-yen pair extends gains, likely resistance level is seen at 80.20. Further downside pressure could bring about the pair fall below the key 79.0 level.
The yen edged sharply higher in the morning after Japan downgraded its assessment of the world's third-biggest economy for the first time in 10 months, citing slowing global growth and downside risks emanating from the euro area debt crisis.
The Canadian dollar also touched 1.0247 against its Australian counterpart around 8:15 am ET, its strongest level since June 15. The loonie is in a recovery mode against the Australian dollar as the cross is in the path towards a major demand zone near parity in the medium-term.
The Canadian dollar erased some of its previous session's losses against the euro, snapping back to 1.2392 around 8:35 am ET from a low of 1.2426 hit in early deals. The next upside target level for the Canadian unit is seen at 1.2340.
German consumer confidence is set to remain unchanged in September, contrary to expectations for a decline, a key survey revealed today. Market research group GfK said its consumer confidence index for September scored 5.9, unchanged from August. Economists expected the index to drop to 5.8.
Looking ahead, the Conference Board is scheduled to release the U.S. consumer confidence report for August at 10:00 am ET. The consumer confidence index is expected to edge down to 65.5 in August.
The S&P/Case-Shiller home price index is scheduled to be released at 9 am. Economists expect a 0.3 percent year-over-year drop in the 20-city composite house price index for June.
