Canadian Dollar Advances As Oil Prices Rally On Saudi Pledge To Cut Exports

The Canadian dollar climbed against its major opponents in the European session on Monday, as oil prices advanced after Nigeria agreed to join the production cuts and the Saudi pledged to limit crude exports in next month at a gathering of oil ministers in Russia.

Crude for September delivery rose $0.20 to $45.97 per barrel.

Speaking in St Petersburg, Saudi Arabia's energy minister Khalid al Falih said the kingdom would cap its oil exports at 6.6 million barrels per day in August, a decrease of 1 million barrels per day year-on-year.

Saudi also demanded participation of all OPEC and non-OPEC members in contributing their share of output caps as their attempts failed to prop up prices.

"[We are] not going to allow other countries to free ride and undercut the agreement…everyone needs to contribute," he said.

OPEC also secured production commitment from Nigeria, which has been exempt from last year's pact, to join the deal and cap its output when its production reach a sustained 1.8 million barrels of oil per day.

Data from Statistics Canada showed that Canada's wholesale sales rose 0.9 percent to a record high $61.6 billion in May. Sales were up in six of the seven subsectors, representing 80% of total wholesale sales.

The loonie showed mixed performance in the Asian session. While the loonie fell against the yen and the aussie, it held steady against the greenback and the euro.

The loonie rose to a 4-day high of 1.4557 against the euro, from an early low of 1.4647. The loonie is likely to find resistance around the 1.44 region.

Flash data from IHS Markit showed that the Eurozone private sector started the third quarter on a solid footing but the pace of growth slowed for the second successive month in July.

The composite output index fell to a 6-month low of 55.8 in July from 56.3 in June. The reading was expected to drop marginally to 56.2.

The loonie advanced to more than a 1-year high of 1.2503 against the greenback, from a low of 1.2552 of hit at 6:00 am ET. Continuation of the loonie's uptrend may see it challenging resistance around the 1.24 area.

The loonie rose back to 0.9940 against the aussie, from an early low of 0.9982. The currency is on track to pierce a 6-day high of 0.9911 set early in the Asian session. If the loonie extends rise, 0.98 is likely seen as its next resistance level.

The loonie edged up to 88.75 against the yen, from an early near a 2-week low of 88.17. The loonie is seen finding resistance around the 89.00 area.

Figures from the Cabinet Office showed that Japan's leading index increased less than initially estimated in May.

The leading index, which measures the future economic activity, rose to 104.6 in May from 104.2 April. The reading for May was revised down slightly from 104.7.

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