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Canadian Dollar Strengthens Against Greenback, Yen As Crude Prices Rally

The Canadian dollar edged higher against the currencies of the U.S. and Japan in early deals Wednesday as the price of crude oil, Canada's key export, was moving higher ahead of today's official U.S. crude oil inventories data from the Energy Information Administration.

Light Sweet Crude Oil (WTI) futures for May delivery, the most actively traded contract, moved up $0.63 to $93.15 a barrel.

Yesterday, oil settled lower on demand growth concerns in the eurozone after the Cyprus parliament voted to reject a controversial deposit tax proposal made by international lenders for a bailout package.

Tuesday after the market hours, the API said crude oil inventories dipped 413,000 barrels, while gasoline stocks moved up by 278,000 barrels in the weekended March 15.

The Canadian dollar climbed to a session's high of 93.18 against the yen around 7:15 am ET, up almost 0.9 percent from Asian session's low of 92.36.

The Canadian dollar also rose as high as 1.0243 against the US dollar before leveling off around 6:25 am ET. This was up by more than 0.35 percent from Asian session's low of 1.0281.

Canada's currency held steady against the euro in early deals, trading between 1.3260 and 1.3224 most of the session.

Germany's producer price inflation slowed more than economists expected in February, data released by the Federal Statistical Office showed today.

The producer price index increased 1.2 percent on an annual basis in February, notably slower than the 1.7 percent gain seen in January. Economists were looking for a 1.5 percent.

On a monthly basis, the producer price index decreased a seasonally adjusted 0.1 percent in February, reversing the previous month's 0.8 percent increase. Economists expected prices to rise 0.2 percent sequentially.

The Eurozone current account surplus declined in January largely due to the widening deficit on current transfers, data from the European Central Bank showed today.

The current account surplus came in at seasonally adjusted EUR 14.8 billion in January, down from EUR 16 billion in December.

Looking ahead, the U.S. FOMC will release its post-meeting policy statement at 2:00 pm ET. Around the same time, the Fed will also release its updated economic forecasts.

At 2:30 pm ET, Federal Reserve Chairman Ben Bernanke is scheduled to address a press briefing to explain the Fed decision.

by RTT Staff Writer

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