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Canadian Dollar Slides Amid Risk Aversion, Oil Prices Decline

The Canadian dollar slipped against its major counterparts in the European session on Thursday, as oil prices declined after official data showed a lower than expected draw in crude oil inventories last week.

Crude for June delivery fell $0.50 to $48.57 per barrel.

Data from the Energy Information Administration showed that crude inventories fell 1.8 million barrels to 520.8 million barrels in the week ended May 12. Economists had expected the crude stocks to fall by 2.36 million barrels.

This follows industry data from the American Petroleum Institute on Tuesday, which showed that oil inventories rose more than 800,000 barrels.

With the U.S. oil supplies being abundant, investors are worried over ongoing efforts by OPEC to tighten the market by reducing oil production.

The currency was also hammered by U.S. political turmoil that stocked fears about the ability of the U.S. President Donald Trump to push through his reform agenda.

Besieged from all sides, the Trump administration appointed former FBI Director Robert Mueller as a special counsel to oversee the federal investigation into Russia's involvement in the U.S. presidential election last year.

The loonie fell against its major rivals in the Asian session, with the exception of the Japanese yen.

The loonie dropped to a 3-day low of 1.3669 against the greenback, after having advanced to 1.3580 at 5:45 pm ET. The loonie is likely to locate support around the 1.38 region.

The loonie fell to 1.5208 against the euro, off its early high of 1.5156. If the loonie extends fall, 1.53 is possibly seen as its next support level.

The loonie slipped to 80.65 against the Japanese yen, its lowest since April 21. Continuation of the loonie's downtrend may see it challenging support around the 79.00 area.

Preliminary data from the Cabinet Office showed that Japan's gross domestic product gained 0.5 percent on quarter in the first three months of 2017.

That was in line with expectations and up from 0.3 percent in the previous three months.

The loonie weakened to near a 2-week low of 1.0164 against the aussie, from an early high of 1.0084, and held steady thereafter. The pair closed Wednesday's trading at 1.0109. The next possible support for the loonie is seen around the 1.03 mark.

Data from the Australian Bureau of Statistics showed that Australia's jobless rate rose a seasonally adjusted 5.7 percent in April.

That beat forecasts for 5.9 percent, which would have been unchanged from the March reading.

Looking ahead, the U.S. weekly jobless claims for the week ended May 13, leading indicators for April and Philadelphia Fed manufacturing survey for May are slated for release in the New York session.

At 8:30 am ET, the European Central Bank executive board member Yves Mersch gives keynote address at Government Borrowers Forum hosted by the European Stability Mechanism and the Ministry of Finance of Luxembourg in Luxembourg.

At 8:45 am ET, the European Central Bank executive board member Sabine Lautenschläger speaks at the IBF Board meeting organised by Bundesverband deutscher Banken in Berlin, Germany.

The European Central Bank President Mario Draghi speaks at the Tel Aviv University in Tel Aviv, Israel, at 1:00 pm ET.

Cleveland Fed President Loretta Mester speaks on economy and monetary policy before the Economic Club of Minnesota at 1:15 pm ET.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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