Forex News: Canadian Dollar Falls As Oil Prices Slide

Canadian Dollar Falls As Oil Prices Slide

(RTTNews) - The Canadian dollar weakened against other major currencies in the Asian session on Wednesday, as the crude oil prices fell due to the rise in U.S. crude inventories.

Statistics from the American Petroleum Institute or API showed an increase in U.S. crude stocks, which caused oil prices to slightly decline on Wednesday morning.

Data from API showed that the U.S. crude stockpiles increased by 6.56 million barrels for the week ending March 13.

Brent crude futures dropped $1.15, or 1.11%, to $102.27 a barrel. West Texas Intermediate crude in the United States fell $1.54, or 1.6%, to $94.67.

Traders are looking for past short-term geopolitical uncertainty to focus on upcoming central bank meetings, with the U.S. Fed scheduled to announce its interest-rate decision later in the day. The escalating war in the Middle East and the resultant spike in crude oil prices continue to weigh on market sentiment.

While the Fed is widely expected to leave interest rates unchanged, traders will pay close attention to central bank officials' latest projections. Other major banks of the world, including European Central Bank, Bank of England, and Bank of Japan are also set to announce monetary policy decisions later in the week.

Amid the ongoing Middle East war, economists are awaiting the reasons behind the policy decisions of these major banks to get clues on the near-term interest rate trajectory.

Iran stepped up its attack on energy infrastructure in the Middle East in its war against the U.S. and Israel. The Israeli military also said it had begun a "wide-scale wave of strikes" across Iran's capital and was also stepping up strikes on Iran-backed Hezbollah targets in Lebanon.

In the Asian trading today, the Canadian dollar fell to nearly a 2-week low of 115.72 against the yen, an 8-day low of 1.5827 against the euro and a 1-week low of 0.9762 against the Australian dollar, from yesterday's closing quotes of 116.14, 1.5800 and 0.9728, respectively. If the loonie extends its downtrend, it is likely to find support around 114.00 against the yen, 1.60 against the euro and 0.98 against the aussie.

Against the U.S. dollar, the loonie edged down to 1.3710 from Tuesday's closing value of 1.3691. The loonie may test support near the 1.38 region.

Looking ahead, Eurozone CPI data for February is due to be released at 5:00 am ET.

In the New York session, U.S. MBA weekly mortgage approvals data, PPI data for February, factory orders for February and U.S. EIA crude oil data are slated for release.

At 8:45 am ET, the Bank of Canada will announce its interest rate decision. The central bank id expected to hold its interest rate at 2.25%.

Forty-five minutes later, the BoC Governor Tiff Macklem will speak in a press-conference about the monetary policy decision.

At 2:00 pm ET, the Federal Open Market Committee announce its monetary policy decision. The US Federal Reserve is widely expected to keep interest rates unchanged at 3.75%.

Half-an-hour later, the U.S. Fed chair Jerome Powell deliver a speech in a press conference about the monetary policy outlook.

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