Canadian Dollar Climbs Amid Higher Oil Prices On Saudi Output Cut

The Canadian dollar spiked up against its major rivals in Asian trading on Wednesday, as Saudi Arabia's decision to cut crude production in February and March lifted oil prices.

Saudi agreed to reduce its oil production by one million barrels per day in February and March following two days of talks with the OPEC and its allies.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that the extra reduction was intended to support the country's economy and the oil market.

Russia and Kazakhstan will be permitted to raise their output by a combined 75,000 b/d in February and a further 75,000 b/d in March.

Investors awaited the outcome of a Senate election in Georgia, held on Tuesday.

Asian stock markets fell, while commodities gained on growing expectations for a Democrat-controlled U.S. Senate that paves way for potential regulation and higher taxes.

The loonie gained to 1.2661 against the greenback, from a low of 1.2696 seen at 9:45 pm ET. The currency may test resistance around the 1.22 region.

After a drop to 1.5609 at 7:45 pm ET, the loonie advanced to 1.5572 against the euro. The next possible resistance for the loonie is seen around the 1.54 level.

The loonie touched a 2-day high of 81.19 against the yen, up from Tuesday's close of 81.06. The loonie is poised to test resistance around the 82.5 region.

The latest survey from Jibun Bank revealed that the services sector in Japan continued to contract in December, and at a faster rate, with a services PMI score of 47.7.

That's down slightly from 47.8 in November and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.

In contrast, the loonie weakened to 0.9860 against the aussie, compared to yesterday's closing value of 0.9827. Should the loonie slides further, 1.00 is likely seen as its next possible support level.

The latest survey from Markit Economics revealed that the services sector in Australia continued to expand in December, and at a faster pace, with a five-month high services PMI score of 57.0.

That's up from 55.1 in November and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

Looking ahead, PMI reports from major European economies and Eurozone PPI for November are due in the European session.

At 8:00 am ET, German flash consumer inflation for December will be published.

U.S. ADP private payrolls data for December is scheduled for release at 8:15 am ET.

U.S. factory orders for November and the Fed minutes from the December 15-16 meeting are set for release in the New York session.

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