Forex News: Canadian Dollar Rises Amid Risk-on Mood

Canadian Dollar Rises Amid Risk-on Mood

(RTTNews) - The Canadian dollar strengthened against other major currencies in the European session on Thursday, as European stocks traded higher as investors assess the U.S.-Vietnam deal and look ahead to a decisive round of trade talks in Washington.

EU trade commissioner Maros Sefcovic will meet with U.S. Trade Representative Jamieson Greer today for a potentially decisive round of talks.

It will be the last chance to clinch an initial political agreement before a July 8 deadline or face 50 percent "reciprocal" tariffs.

Elsewhere, British Prime Minister Keir Starmer has backed Rachel Reeves to remain chancellor for "many years to come" after she became tearful during an extraordinary PMQs.

The terms of the deal call for Vietnam to pay a 20 percent tariff on goods sent to the U.S. and a 40 percent tariff on any transshipping.

The South-Asian country will impose 0 percent tariff on U.S. goods, although details were limited. Analysts say the deal risks provoking retaliatory steps from China.

Crude oil prices made sharp gains, even as the Israel-Iran ceasefire holds, as Iran has challenged the IAEA's power to inspect its nuclear sites without its security council's approval. A falling U.S. dollar also offered support for oil. West Texas Intermediate crude oil for August delivery closed up by $2.00 to settle at $67.45 per barrel.

Rising U.S. debt concerns, tariff policies uncertainty, rising interest rate cut bets and weak ADP private payroll data led to the fall of U.S. dollar

Data from payroll processor ADP on Wednesday showed that private sector employment in the U.S. unexpectedly decreased in the month of June. ADP said private sector employment fell by 33,000 jobs in June after rising by a downwardly revised 29,000 jobs in May.

In the European trading today, the Canadian dollar rose to more than 2-week high of 1.3579 against U.S. dollar, from an early low of 1.13601. The loonie may tests resistance around the 1.34 region.

Against the yen and the Australian dollar, the loonie advanced to 2-day highs of 105.87 and 0.8925 from early lows of 105.60 and 0.8946, respectively. If the loonie extend its uptrend, it is likely to find resistance around 107.00 against the yen and 0.87 against the aussie.

The loonie edged up to 1.6027 against the euro, from an early low of 1.6050. On the upside, 1.58 is seen as the next resistance level for the loonie.

Looking ahead, Canada and U.S. trade data for June, U.S. average hourly earnings data for June, U.S. weekly jobless claims data, U.S. S&P Global Composite PMI for June and U.S. Baker Hughes oil rig count data are slated for release in the New York session.

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