Forex News: Canadian Dollar Rises As Crude Oil Prices Advance

Canadian Dollar Rises As Crude Oil Prices Advance

(RTTNews) - The Canadian dollar strengthened against other major currencies in the Asian session on Thursday, as the crude oil prices surged after reports suggest possible U.S. attacks on Iran by next week, fueling supply disruption concerns for an indefinite period.

West Texas Intermediate crude for December was up $3.12 or 3.12 percent at $103.02 per barrel.

A report by Wall Street Journal stated that the U.S. has asked the gulf nations to be prepared for a short but intense military campaign against Iran jointly with Israel after the U.S. midterm elections are over by the first week of November.

Reportedly, the strikes are intended to force Iran back to negotiating table.

While speaking to reporters at Joint Base Andrews in Maryland, U.S. President Donald Trump was asked about these reported plans. In response, he stated that anything is possible.

Trump claimed that though Iran wants a deal, its leaders are deliberately delaying the negotiations as they want to see the U.S. midterm election results. However, Trump warned that this "waiting" will not improve Iran's position.

Leaving open the possibility of a renewed military action if diplomacy fails, Trump repeated once again that Iran's military and finances have been decimated but stated that he wanted to see how things unfold.

Wednesday, the Bank of Canada raised its policy rate by 25 basis points to 2.50 percent, in line with market forecasts.

The European Central Bank (ECB) is expected to publish its interest rate decision later in the day. After raising its deposit rate by 50 basis points earlier this year, the ECB is generally anticipated to maintain it at 2.50 percent. But ongoing energy-driven inflation has prompted concerns about whether decision-makers would boost interest rates once more in December.

As a result, investors will pay attention to the ECB's evaluation of economic growth and inflation risks, as well as any clues about how interest rates will go forward.

In the Asian trading today, the Canadian dollar rose to nearly a 1-1/2-year high of 1.5575 against the euro and nearly a 2-month high of 112.99 against the yen, from yesterday's closing quotes of 1.5610 and 112.78, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.54 against the euro and 114.00 against the yen.

Against the U.S. and the Australian dollars, the loonie advanced to a 6-day high of 1.3970 and a 2-day high of 0.9850 from Wednesday's closing quotes of 1.3995 and 0.9872, respectively. The loonie may test resistance around 1.37 against the greenback and 0.97 against the aussie.

Looking ahead, U.K. mortgage approvals data for September and Eurozone economic sentiment for October are slated for release in the European session.

In the New York session, Canada average weekly earnings for August, U.S. Core PCE price index for September, U.S. GDP growth rate for the third quarter, U.S. personal income and spending for September and U.S. weekly jobless claims are set to be published.

At 9:15 am ET, the European Central Bank (ECB) is scheduled to announce its interest rate decision. The ECB is widely expected to keep its deposit rate unchanged at 2.50 percent.

Half-an-hour later, the ECB President Christine Lagarde will deliver a speech about the monetray policy decision and provide clues about the future rate outlook in a press conference.

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