During early deals on Wednesday, the Canadian dollar fell against its US and Japanese counterparts as the crude oil prices declined for a fourth day on speculation a government report today will show U.S. supplies increased as the recession curbed fuel demand.

U.S. light crude for May delivery fell 97 cents a barrel to $48.18 by 12:56 am ET, after falling as low as $48.10. London Brent crude fell 58 cents to $50.64.

Demand for oil has slumped as the global recession reduces purchases of manufactured goods. Crude-oil inventories climbed 2.84 million barrels to 359.4 million in the week ended March 27, the highest since July 1993, the Energy Department reported on April 1.

Adding further pressure on oil, the U.S. dollar rose as investors see the greenback as a safer haven at times of market stress, making U.S. dollar-denominated commodities more expensive for overseas investors.

Stock markets, which investors are watching for clues as to when oil consumption might rebound, are continuing to signal a dismal outlook, and the first signs from the earnings season were bearish.

Alcoa, which kickstarted the earnings season in the U.S., released first quarter results after the markets closed yesterday, reporting a net loss that was worse than analysts' expectations, with the company attributing the impact of the economic downturn to its core industrial and commercial markets as well as a historic decline in aluminum prices.

Asian stocks slid for a second day today with investors fleeing to the sidelines to await companies' outlooks.

The Canadian dollar, which closed yesterday's trading at 81.18 against the yen, fell to a 5-day low of 80.00 in early deals on Wednesday. If the loonie-yen pair slides further, it may likely target the 78.7 level.

The current account balance in Japan swung to a surplus in February, coming in at 1.116 trillion yen, the Ministry of Finance said in a preliminary report today. That's down 55.6 percent on year, even though it beat expectations for a surplus of 1.071 trillion yen following the record 172.8 billion yen shortfall in January.

During early deals on Wednesday, the Canadian dollar weakened against the U.S. currency and touched a low of 1.2468 at 2:15 am ET. The next downside target level for the loonie is seen at 1.2486. At yesterday's close, the greenback-loonie pair was quoted at 1.2375.

In early deals on Wednesday, the Canadian dollar climbed to a 5-day high of 0.8752 against the Aussie. This may be compared to Tuesday's closing value of 0.8801. On the upside, 0.866 is seen as the next target level for the Canadian dollar.

On the economic front, the Westpac/Melbourne Institute's survey of consumer sentiment for April showed that Australian consumer confidence surged 8.3% to 92.7 points in April.

A separate report from the Australian Bureau of Statistics showed that the number of loans for new homes in Australia increased in February by a seasonally adjusted 0.4 percent over January, while the value of owner-occupied home construction permits increased 2.7 percent.

Against the euro, the Canadian dollar jumped to a 26-day high of 1.6353 during early trading on Wednesday. If the loonie advances further, it is likely to target the 1.622 level. The euro-loonie pair was worth 1.6423 at Tuesday's North American session close.

Germany's Federal Statistical Office announced today that the trade surplus stood at EUR 8.7 billion in February, up from EUR 7 billion surplus recoded in the previous month. Economists had expected the surplus of EUR 7.5 billion.

Looking ahead, the German factory orders report for February is due at 6:00 am ET.

Across the Atlantic, the US Commerce Department is due to release its wholesale inventories report at 10 am ET today. Economists expect wholesale inventories at the end of February to show a 0.6% decline.

The Energy Information Administration is scheduled to release its weekly petroleum inventory report at 10:30 am ET.

At 2:00 pm ET, the Federal Reserve is scheduled to release the minutes of its March 17th-18th meeting.

Along with an announcement to keep interest rates unchanged at exceptionally low levels following its two-day FOMC meeting in March, the Fed said it would purchase $300 billion worth of longer-term securities over the next 6 months. Additionally, the Fed said it will buy an incremental $750 billion worth of mortgage-backed securities and $100 billion of government sponsored enterprises - GSE debt. The Fed also said it intends to add $100 billion to its purchases of agency debt.

From Canada, the housing starts report for March has been slated for release at 8:15 am ET.

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