News Column

Canadian Dollar Rises Against Majors

August 26, 2014

CANBERA (Alliance News) - The Canadian dollar strengthened against the other major currencies in the Asian session on Wednesday as Canadian equity market rallies to record levels and ahead of the nation's economic growth data to be released on Friday.

The S&P/TSX Index of the Toronto Stock Exchange closed at a record on Tuesday after US-based Burger King announced plans to buy Canadian coffee and doughnut chain Tim Hortons for USD11 billion in a cash-and-stock deal.

Statistics Canada is set to release the June reading on gross domestic product growth on Friday.

Economists expect GDP to rise to 1.2% in June, which would translate into annualized growth of 2.7%. Year-on-year, the GDP is seen at 3% compared to 2.3% in last month. Meanwhile, crude oil prices have been higher on geopolitical concerns.

Crude oil for October delivery is currently up USD0.07 to USD93.93 a barrel after settling Tuesday's session up 0.50%.

President Vladimir Putin of Russia held meeting with Petro Poroshenko, president of Ukraine yesterday, insisting on Kiev to work out conditions for a ceasefire with separatist rebels.

Meanwhile, US President Barack Obama reiterated that US combat troops will not be sent back into Iraq even though the US is providing military assistance to the Iraqi government and the Kurds in their battle against Sunni extremists who have taken hold of large sections of the Middle East country.

Reports quoting radical Islamist group Hamas said Egyptian-mediated indirect talks aimed at finding a more durable solution to the conflict in Gaza has resulted in a breakthrough. Israel and Palestinians agreed to a long-term cease-fire on Tuesday, senior Palestinian officials were quoted as saying.

Data on Tuesday showed orders for USmanufactured durable goods posted their biggest gain on record in July, while consumer confidence rose in August to its highest level since October 2007.

The Canadian dollar rose to a 9-month high of 1.4381 against the euro and a 1-1/2-month high of 95.25 against the yen, from early lows of 1.4427 and 94.97, respectively. If the loonie extends its uptrend, it is likely to find resistance around the 1.42 against the euro and 96.00 against the yen.

Against the US dollar and the Australian dollar, the loonie advanced to an 8-day high of 1.0924 and a 5-day high of 1.0175 from early lows of 1.0955 and 1.0204, respectively. The loonie may test resistance near 1.08 against the greenback and 1.013 against the aussie.

Looking ahead, German import price index for July and GfK German consumer sentiment for September are due at 2:00 am ET.

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Source: Alliance News

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