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Forex - USD/CAD dips as rising oil prices bolsters Canadian currency

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Investing.com - The U.S. dollar fell against its Canadian counterpart on Friday after rising oil prices sparked demand for the loonie.

In U.S. trading on Friday, USD/CAD hit 1.0224, down 0.23%, up from a low of 1.0220 and off a high of 1.0265.

The pair sought to test support at 1.0201, Thursday's low, and resistance at 1.0284, Tuesday's high.

Hopes Cyprus and its European neighbors will steer the island nation out of its financial crisis sent petroleum prices rising earlier, which bolstered the currency in oil-rich Canada.

Greece has reportedly agreed to take control of its Cypriot banking units, which fueled hopes the country will avoid a messy exit from the eurozone and rattle the global economy, which would cut into demand for fuels and energy.

Better-than-expected U.S. economic indicators released Thursday bolstered oil as well, which brought up the loonie with it.

The U.S. Department of Labor reported that the number of people filing for initial jobless benefits last week rose by 2,000 to a seasonally adjusted 336,000, below expectations for an increase of 8,000 to 342,000.

Manufacturing data in the U.S. beat expectations as well.

The Federal Reserve Bank of Philadelphia reported that manufacturing activity in the bank's jurisdiction expanded at its fastest pace in three months in March, with the Philly Fed manufacturing index rising to 2.0 from February's reading of -12.5, far outpacing market calls for a -2.0 reading.

Elsewhere, the National Association of Realtors, meanwhile, reported that existing home sales rose 0.8% to 4.98 million units in February, the highest level in three years.

Meanwhile, the countries belonging to the OPEC oil cartel, which accounts for 40% of global oil output, said they will cut shipments by 40,000 barrels per day to 23.72 million barrels a day for the weeks ending April 6, which pushed up prices as well.

The Canadian dollar, meanwhile, was down against the euro and down against the yen, with EUR/CAD up 0.39% and trading at 1.3271 and CAD/JPY down 0.33% at 92.30.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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