Canadian Dollar Strengthens On Risk Appetite
November 19 2019 - 12:39AM
RTTF2
The Canadian dollar strengthened against its major counterparts
in early European deals on Tuesday, as European shares rose despite
mixed signals from U.S.-China trade front.
Uncertainty about the U.S.-China deal lingered after CNBC
reported that China is pessimistic about striking a trade deal due
to Trump's reluctance to roll back trade tariffs on Chinese
goods.
Concerns eased somewhat after Trump administration has issued a
new 90-day extension that will allow U.S. companies to continue
doing business with Chinese telecom giant Huawei Technologies.
Earlier on Monday, there were reports in Chinese media that
officials from the two countries were engaged in "constructive
discussions" in a high-level phone call.
The currency showed mixed trading against its major counterparts
in the Asian session. While it rose against the aussie and the
greenback, it fell against the yen and the euro.
The loonie advanced to 82.39 against the yen, from a 4-day low
of 82.06 hit at 8:00 pm ET. The loonie is seen finding resistance
around the 83.5 level.
Bank of Japan Governor Haruhiko Kuroda said that the central
bank still has room to lower interest rates further.
However, there were limits to how long rates could go down, he
said at the parliament.
The loonie edged up to 1.4612 against the euro, after rising to
1.4633 at 2:00 am ET. On the upside, 1.44 is likely seen as the
next resistance level for the loonie.
Data from the European Central Bank showed that the euro area
current account surplus declined in September largely due to the
fall in primary income.
The current account surplus totaled EUR 28 billion in September
versus EUR 29 billion in August. In the same period last year, the
surplus came in at EUR 21 billion.
The loonie was trading higher at 1.3205 against the greenback,
not far from near a 2-week high of 1.3199 seen at 5:00 pm ET. If
the loonie rallies further, it is likely to test resistance around
the 1.30 region.
In contrast, the loonie declined to 0.9004 against the aussie,
off near a 3-week high of 0.8967 set in the previous session. Next
immediate support for the loonie is likely seen around the 0.945
level.
Looking ahead, Canada manufacturing sales for September and U.S.
housing starts for October will be featured in the New York
session.
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