The Canadian dollar edged lower against the US dollar and the Japanese yen in late Asian trading on Thursday as crude oil price fell for the first time in 3 days. The Canadian dollar, however, rallied against the euro mainly due to the across the board weakening of the latter.
Crude oil prices, which closed near US$83 a barrel on Wednesday after members of the Organization of the Petroleum Exporting Countries decided to leave their oil output unchanged, pared gains on Thursday in Asia as the dollar gained and an Energy Department report showed that U.S. crude inventories climbed for a seventh week.
Light sweet crude oil for delivery in April was down 0.68 percent or 0.56 cents at US$82.37 per barrel in the New York Mercantile Exchange at 2:40 am ET.
The Canadian dollar declined to 88.90 against the Japanese yen before recouping some of its losses around 2:00 am ET. The loonie-yen pair is presently worth 88.98, compared to yesterday's close of 89.41.
Today, the Bank of Japan retained its economic view and said conditions are likely to continue improving, although the pace of improvement is likely to remain moderate for the time being.
"Japan's economy is picking up mainly due to various policy measures taken at home and abroad, although there is not yet sufficient momentum to support a self-sustaining recovery in domestic private demand," the central bank said in its Monthly Report of Recent Economic and Financial Developments for March.
The BoJ reiterated that the financial environment, with some lingering severity, has continued to show signs of improvement.
Against the US dollar, the Canadian dollar drifted lower to 1.0141 before showing choppy trend around 1:50 am ET. The greenback-loonie pair that closed yesterday's deals at 1.0105 is presently quoted at 1.0136.
On the flip side, the Canadian dollar rose to more than a 2-year high against the European currency in the session. The loonie touched 1.383 against the euro around 3:55 am ET, compared to 1.3882 hit late New York Wednesday. The euro-loonie pair is presently quoted at 1.3835
Looking ahead, the European Central Bank is expected to release current account data for January at 5:00 am ET. A current account surplus of EUR 1.9 billion was recorded in December on a seasonally adjusted basis.
Trade data for January is due from the Italian statistical office at the same time. A trade deficit of EUR 1.65 billion is expected.
Across the Atlantic, all eyes will be on the U.S. weekly jobless claims report and consumer price data, with concern brewing in the markets over high unemployment coupled with the prospect of rising inflation.
A report on leading economic indicators, current account balance and the Philadelphia business activity barometer are also likely to garner market attention.
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