RTTN:Canadian Dollar Extends Downtrend Against Majors
(RTTNews) - The petro-linked Canadian dollar weakened against its major rivals in early deals Monday as the price of crude oil fell on fading risk appetite amid renewed concerns about Europe and China.
Light Sweet Crude Oil (WTI) futures for November delivery lost $1.28 to $91.61 a barrel. Last week, oil shed nearly 6 percent lower amid rumors of oil release from the Strategic Petroleum Reserve after prices galloped following the Federal Reserve announcement of additional quantitative easing measures the previous week.
Eurozone worries persist amid reports that Greece has an estimated budget gap of EUR 20 billion, almost double from Troika's previous projection, posing a major hindrance for the debt-ridden nation to get the next tranche of bailout money.
The China Beige Book survey of more than 2,000 executives showed that manufacturers and retailers are less optimistic about sales than they were three months ago, adding concern over the red-dragon's economic strength.
Uncertainty over progress in Greece's latest budget cuts and continued concerns over the future of Spain prompted traders to flee from high-yielding assets.
Pulling back from last week's key resistance level above the 81.50 against the yen, the Canadian dollar reached an 11-day low of 79.53 in early deals Monday. The loonie-yen pair downtrend may not get a perfect shape until reaching below 79.0 as the longer-term resistance of 85.0 level has not yet broken.
The Canadian currency also tested last week's near 2-week low of 0.9818 against the US dollar on Monday. The loonie reached as low as 0.9817 versus the greenback before paring a few pips around 7:00 am ET. On the downside, the Canadian dollar may find target around the 0.9850 level.
The Canadian unit erased its Asian session advance against the euro in early deals, falling to 1.2684 around 7:40 am ET from a high of 1.2640 hit earlier in the session. The near-term support for the Canadian dollar is seen around the 1.27 level.
German business sentiment declined for the fifth consecutive month in September suggesting that even the bond purchase programme announced by the European Central Bank failed to shore up confidence.
The business climate index fell to 101.4, which was the lowest since March 2010, from 102.3 in August, the survey based on 7,000 executives by the Ifo Institute showed Monday. The index was forecast to remain unchanged at 102.3.
