Canadian Dollar Appreciates On Vaccine Hopes

The Canadian dollar climbed against its most major counterparts in the European session on Tuesday, as optimism about the start of coronavirus vaccinations and hopes of further U.S. fiscal stimulus underpinned risk sentiment.

Vaccinations in the U.S. commenced on Monday to conquer the outbreak that has claimed above 300,000 lives in the country.

U.S. stimulus talks will be on focus, as Congressional leaders attempt to reach a deal along with the spending measure to be approved by Friday.

China industrial output rose in line with expectations in November, suggesting sustained economic recovery.

Investors await the outcome of the U.S. Federal Reserve's two-day meeting beginning on Tuesday for more clues about adjusting its quantitative easing program.

The Bank of England and the Bank of Japan are also due to hold their meetings this week.

The loonie advanced to a 4-day high of 0.9587 versus the aussie from Monday's closing value of 0.9613. On the upside, 0.94 is likely seen as its next resistance level.

Minutes from the Reserve Bank of Australia's December 1 meeting showed that members of the board acknowledged that global economic outlook remains mired in uncertainty due to the Covid-19 pandemic.

Australia's economy continued to be below pre-pandemic levels, the board said, although it has often been better than expected. The board also said to make one of its top priorities a means of dealing with stubbornly high unemployment.

The loonie edged up to 1.2746 against the greenback and 1.5479 against the euro, off its early lows of 1.2772 and 1.5519, respectively. The loonie is seen finding resistance around 1.25 against the greenback and 1.52 against the euro.

In contrast, the loonie eased off from a 4-day high of 81.65 against the yen, with the pair trading at 81.43. The loonie is likely to face support around the 79.5 level.

Looking ahead, Canada housing starts for November are scheduled for release at 8:15 am ET.

U.S. industrial production and export and import prices for November and New York Fed's empire manufacturing index for December will be released in the New York session.

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