Canadian Dollar Advances On Rising Oil Prices

The Canadian dollar was higher against its major counterparts in the European session on Wednesday, as oil prices rose after the Organization of Petroleum Exporting Countries and allies agreed to proceed with plans to gradually increase oil production despite COVID-19 crisis in India.

Crude for June delivery rose $0.75 to $63.69 per barrel.

The cartel and its partners held a surprise meeting on Tuesday, a day ahead of schedule.

The group "highlighted the continuing recovery in the global economy" and decided to increase the global crude oil supply from May in accordance with the plan agreed in their previous meeting on April 1.

Data from Statistics Canada showed that Canada's retail sales rose 4.8 percent on month in February, following a drop of 1.1 percent in January. Economists had forecast an increase of 4 percent.

Core retail grew 4.8 percent on month in February, compared to a 1.2 percent fall in the previous month. Sales were forecast to grow 3.7 percent.

The loonie advanced to a fresh 3-week high of 87.96 against the yen and near a 6-week high of 1.2382 against the greenback, off its early lows of 87.57 and 1.2418, respectively. The next possible resistance for the loonie is seen around 92.00 against the yen and 1.20 against the greenback.

The loonie appreciated to more than a 2-week high of 1.4945 against the euro, coming off from its prior low of 1.5000. If the loonie rises further, 1.47 is likely seen as its next resistance level.

Survey results from the market research group GfK showed that German consumer confidence is set to weaken in May as rising cases of infections and the tightening of the lockdown weigh on consumption.

The forward-looking consumer sentiment index fell to -8.8 in May from revised -6.1 in April. The score was forecast to rise to -3.5.

In contrast, the loonie held steady against the aussie, after having climbed to a 2-week high of 0.9591 in the Asian session. The pair had closed yesterday's deals at 0.9624.

Data from the Australian Bureau of Statistics showed that Australia's consumer prices rose 0.6 percent on quarter in the first quarter of 2021.

That was shy of expectations for 0.9 percent, which would have been unchanged from the three months prior.

Looking ahead, at 2:00 pm ET, the Fed announces its decision on interest rate. Economists widely expect the federal funds rate to be kept at 0 - 0.25 percent.

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