Monday in Asia, the Canadian dollar jumped to its highest level in almost 5-months against the yen as the crude oil prices climbed above $53 a barrel today as investors shrugged off gloomy economic data and held out hope for a global recovery. The loonie also rose to a 12-day high against the US currency.
U.S. light crude for May delivery were up $1.08 at $53.59 a barrel at 1:02 am ET. London Brent crude rose 71 cents to $54.18 a barrel.
Oil climbed as the Group of 20 nations' plan to spend $1 trillion prompted the US dollar to drop for a third day, boosting the appeal of commodities priced in the U.S. currency.
The contract fell 13 cents, or 0.3 percent, to $52.51 a barrel on Friday, after a report showed the U.S. jobless rate jumped to a 25-year high in March. Prices surged 8.8 percent the day before, when the G20 announced its stimulus plan.
Overall, oil prices rose last week as the dollar weakened and as world equity markets rallied on speculation the worst of the global recession may be over soon.
Although crude oil prices have risen roughly 16 percent so far this year, they are still about 63 percent below their high of more than $147 a barrel last July.
The low-yielding currencies like the U.S. dollar and the yen fell with the jump in equities as investors sell them to invest in riskier assets.
The Canadian dollar, which closed last week's trading at 81.48 against the yen strengthened to 82.58 during Asian deals on Monday. This set the highest point for the loonie since November 10, 2008. The next upside target for the loonie-yen pair is seen around the 84 level.
The Bank of Japan began its two-day policy meeting today and will announce the rate decision tomorrow. Analysts expect the central to keep rates steady at 0.1%.
In Asian trading on Monday, the Canadian dollar rose to a 12-day high of 1.2228 against the US currency. This may be compared to Friday's closing value of 1.2313. If the loonie gains further, it may likely target the 1.219 level.
The Federal Reserve Chairman Ben Bernanke said on Friday that programs to unfreeze credit markets are working. In a speech at a symposium on Financial Markets in Charlotte, North Carolina, Bernanke praised the actions of policymakers as lowering the cost and increasing the availability of credit.
The bevy of new lending programs offered by the Federal Reserve appear to be achieving their objectives, Bernanke said, having significantly reduced funding pressures for financial institutions, helped to reduce rates in bank funding markets, and increased overall financial stability.
The Canadian dollar bounced between 0.8827 and 0.8793 against the Aussie during Asian deals on Monday. The near term resistance and support levels for the aussie-loonie pair are seen around 0.89 and 0.875, respectively. The pair closed Friday's trading at 0.8815.
In economic news from Australia, the TD Securities-Melbourne Institute inflation gauge fell 0.1% in March, while the annual rate rose by 2.6%.
Additionally, the survey from Australia and New Zealand Banking Group showed that the total number of job advertisements fell 8.5% in March from the month before, to average 147,804 a week.
The Canadian dollar fell to 1.6669 against the euro at 6:05 pm ET Sunday. Thereafter, the loonie bounced back and the pair moved sideways. On the upside, 1.654 is seen as the next target level for the Canadian currency. At last week's close, the euro-loonie pair was quoted at 1.6612.
In the European session, the Euro-zone PPI and retail sales-both for the month of February and the sentix investor confidence report for April have been slated for release.
Turning to the U.S., the Fed governor Kevin Warsh will speak about the financial markets at a conference in Washington D.C. at 1:00 pm ET.
From Canada, the building permits report for February and the Ivey PMI for March are expected.
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