The Canadian dollar eased on Wednesday as the price of crude trimmed yesterday's solid gains ahead of the U.S. crude oil inventories report, which is due out in New York morning.
Crude prices influence the loonie as Canada is the sixth largest oil producing country in the world and holding the second biggest oil reserves after Saudi Arabia.
Light Sweet Crude Oil (WTI) futures for May delivery, edged down $0.14 to $104.49 a barrel.
Yesterday, oil ended at a 2-week high on global cues, with some encouraging economic data that showed economic sentiment in Germany improved for the fifth straight month, while Spain's treasury bill auction saw strong demand although at a higher cost.
Tuesday after the market hours, the API said US crude oil inventories increased by 3.40 million barrels, while gasoline stocks dipped by 2.60 million barrels in the weekended April 13.
The EIA will release its report on US crude oil inventories for the weekended April 13 at 10:00 am ET. Analysts expect crude oil inventories to add 400,000 barrels and gasoline stocks to move up by 140,000 barrels last week.
The Canadian dollar reached 0.9917 against the greenback around 8:00 am ET, down from yesterday's 4-week high of 0.9867.
Against the yen, the loonie erased previous session's gains and traded near the 82.0 level, down from a 12-day high of 82.48 hit in the Asian session.
The Bank of Japan Governor Kiyohiko Nishimura said today that the central bank is ready take up further monetary easing if necessary, though the policy decision depends largely on the outlook for economic activity and prices.
"The Bank is committed to implementing additional easing measures, if deemed necessary," he said in a speech before business leaders in Okayama.
However, "the Bank's policy decision depends on the outlook for economic activity and prices and on the results of the assessment of risk factors in the context of achieving the price stability goal," he added.
The Canadian currency also eased to 1.2975 against the euro by 8:10 am ET from previous session's 5-week peak of 1.2940.
The euro area construction output decreased a seasonally adjusted 7.1 percent on a monthly basis in February, sharply faster than the 0.5 percent growth seen in January.
On an annual basis, construction output fell 12.9 percent in February, following the previous month's 2.7 percent decrease.
by RTT Staff Writer
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