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Forex News: Canadian Dollar Drops On Falling Oil Prices

Canadian Dollar Drops On Falling Oil Prices

10/31/2019 - 07:24:00 (RTTNews)

(RTTNews) - The Canadian dollar declined against its most major counterparts in the European session on Thursday, as oil prices dropped after official data showed that China's factory activity slipped to an eight month-low in October, raising fresh concerns of lower fuel demand.

Crude for December delivery declined $0.08 to $54.98 per barrel.

The manufacturing PMI fell to 49.3 from 49.8 a month ago. China's service sector also logged weaker growth in October, with the corresponding index coming in at 52.8, down from 53.7 in September.

The U.S. Energy Information Administration reported Wednesday that crude inventories rose 5.7 million barrels in the week to Oct. 25, more than twice the expected jump.

Trade worries intensified after China expressed worries about reaching a comprehensive long-term trade deal with the U.S.

The Bloomberg reported that China cautioned of a long-term trade deal with U.S., triggering uncertainty over an interim trade deal that was almost finalized.

The loonie dropped to 82.16 against the yen, its lowest since October 16. The next likely support for the loonie is seen around the 80.5 level.

The Bank of Japan maintained its policy rates but it signaled further monetary easing going forward.

The central bank said short and long-term interest rates are expected to remain at their current or lower levels as long as it is necessary to achieve its price stability target.

The loonie edged lower to 1.3178 against the greenback, down from a high of 1.3149 it touched at 3:00 am ET. On the downside, 1.33 is possibly seen as the next support level for the loonie.

The loonie fell to 1.4720 against the euro, a level unseen since August 29. The loonie may challenge support around the 1.48 level.

Flash estimates from the Eurostat showed that Eurozone's inflation slowed in October to its lowest level in nearly three years.

The consumer price index rose 0.7 percent year-on-year following a 0.8 percent increase in September. The inflation rate was in line with economists' expectations.

In contrast, the loonie recovered to 0.9076 against the aussie, from a 1-1/2-month low of 0.9120 seen at 10:00 pm ET. The loonie is likely to face resistance around the 0.89 region, if it gains again.

Data from the Australian Bureau of Statistics showed that Australia building approvals rose a seasonally adjusted 7.6 percent on month in September - coming in at 14,004.

That beat expectations for a flat reading following the 1.1 percent drop in August.

Looking ahead, Canada GDP data for August, U.S. weekly jobless claims for the week ended October 26, personal income and spending data for September will be featured in the New York session.

For comments and feedback: contact editorial@rttnews.com

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