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Oil price rise underpins Canadian dollar, greenback steady

12/27/2017, 10:03:57 AMBasics of Trading
Oil price rise underpins Canadian dollar, greenback steady

The dollar held steady versus a basket of major currencies on Wednesday, while the Canadian currency traded near a three-week peak, drawing support after oil prices climbed to 2-1/2 year highs.

The dollar index, which measures the greenback against a basket of six major rivals, was little changed at 93.300. (DXY)

The Canadian dollar last stood at C$1.2694 per U.S. dollar, near Tuesday's peak of C$1.2684, which was the loonie's highest level since Dec. 6.

Oil prices surged to 2-1/2 year highs on Tuesday, boosted by news of an explosion on a Libyan crude pipeline as well as voluntary OPEC-led supply cuts. [O/R]

Commodity-linked currencies such as the Canadian dollar are likely to gain support on the crude rally, although it remains unclear whether there will be a sustained rise in oil prices, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore.

"I think it's going to lend the oil-related currencies," he said.

With many market participants on holiday ahead of the year-end, currency moves could be exaggerated by thin trading conditions, Innes added.

Moves among major currencies were modest with the U.S. dollar edging up 0.1 percent to 113.31 yen , while the euro was little changed at $1.1860 .

Bitcoin edged up 0.9 percent to about $15,900 (BTC=BTSP) on the Luxembourg-based Bitstamp exchange. That came after bitcoin bounced on Tuesday after sliding 25 percent last week, its biggest weekly drop since 2013.