News Column

Canadian Dollar Falls As Oil Prices Slide

July 7, 2014

CANBERA (Alliance News) - The Canadian dollar weakened against its key counterparts in the Asian session on Tuesday, as oil prices eased on expectation that Libya would resume exports of crude oil, and on non-disruption in oil supplies amid tensions in Iraq.

Crude oil for August delivery are currently down USD0.08 to USD103.45 a barrel.

Oil prices eased after Libya's interim Prime Minister Abdullah al-Thani said authorities that the nation is prepared to increase oil exports following the end of a near year-long blockage of two key ports by rebels.

The ports at Ras Lanuf and Al-Sidra ship 560,000 barrels of crude per day, about 40% of the country's 1.3 million barrels a day of export capacity to global energy markets.

Prices also softened as Islamic insurgents in Iraq are yet to directly threaten the key oil-producing region in the country's south.

The Canadian dollar fell to an 8-day low of 1.0693 against the US dollar and a 5-day low of 1.4547 against the euro, from early highs of 1.0675 and 1.4524, respectively. At yesterday's close, the loonie was trading at 1.0682 against the greenback and 1.4533 against the euro. If the loonie extends its downtrend, it is likely to find support around 1.07 versus the greenback and 1.46 versus the euro.

Against the Australian dollar, the loonie slipped to a 5-day low of 1.0037 from an early high of 1.0003. The pair was quoted at 1.0009 at yesterday's close. The loonie may find support near the 1.01 region.

A survey by the National Australia Bank showed that Australian business confidence improved in June, although conditions remained sub-trend. The NAB business confidence index increased to 8 in June from 7 in May despite the government's challenging new budget. This improvement was driven by strengthened confidence in almost all the industries, with the surge in construction industry confidence contributing the most.

Pulling away from an early high of 95.37 against the yen, the loonie dropped to a 1-week low of 95.18. The loonie-yen pair closed yesterday's deals at 95.06. On the downside, the loonie may find support around the 94.77 area.

Data from the Ministry of Finance showed that Japan posted a current account surplus of 522.8 billion yen in May - remaining in the black for the fourth straight month. The headline figure topped forecasts for a surplus of 429.9 billion yen, and was up from 187.4 billion yen in April.

Looking ahead, the EU finance ministers meeting will be held in Brussels at 3:00 am ET.

The US consumer credit for May is set to be released in the New York session.

At 1:45 pm ET, Minneapolis Fed President Narayana Kocherlakota will deliver a speech on Monetary Policy in Minneapolis.

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Source: Alliance News

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