The Canadian dollar edged higher ahead of the North American session on Tuesday as crude oil prices trimmed their initial losses. Resource-linked assets were particularly higher on hopes that China will take more measures to prevent a rapid economic slowdown.
Also, investors became optimistic ahead of European Union summit scheduled at Brussels tomorrow. The meeting will focus on steps to boost economic growth to solve the continent's debt crisis.
After a brief pause in the previous session, the price of crude oil was extending its southward journey Tuesday morning amid a steady U.S. dollar. However, the oil trimmed their losses and Light Sweet Crude Oil (WTI) futures for June delivery is currently trading at $92.52 a barrel, slightly lower than yesterday's closing quote of $92.57.
The Canadian dollar touched a 5-day high of 78.65 against the yen around 8:00 am ET, rightly climbing back from yesterday's key support zone at 78.30/35 area. The next upside target for the loonie-yen pair is seen around the 79.50 level.
The yen was mostly lower after Fitch Ratings trimmed Japan's credit ratings today, citing growing risks to credit profile as a result of high and increasing public debt ratios.
The long-term foreign and local currency Issuer Default Ratings were lowered to 'A+' from 'AA' and 'AA-' respectively. The outlooks on both ratings are Negative.
The Canadian dollar advanced to a 4-day high of 1.2969 against the euro, up almost 100-pips from yesterday's fresh 2-week low of 1.3068. On the upside, the loonie is heading towards the psychologically important mark of 1.29.
The Canadian dollar erased much of its early European session's losses against its US counterpart ahead of the North American deals, rising to 1.0161 from the day's low of 1.0190. The loonie is poised to re-test Asian session's 4-day high of 1.0154 in the near-term.
Traders are now looking for the economic data from south of the boarder, where the National Association of Realtors is scheduled to release its report on existing home sales for April at 10 am ET. Economists estimate existing home sales of 4.66 million for the month after sales fell 2.6 percent month-over-month to an annualized rate of 4.48 million units in March.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.