Canadian Dollar Slides Amid Crude Oil Prices Drop
11:15, 26th May 2023
(RTTNews) - The Canadian dollar weakened against other major currencies in the Asian session on Friday, as crude oil prices slid after Russia's Deputy Prime Minister said Russia won't agree on any additional cut in crude production.
Meanwhile, the benchmark West Texas Intermediate Crude oil futures for July ended down $2.51 or 3.4 percent at $71.83 a barrel. Also, the Brent crude futures settled down $2.10, or 2.7 percent at $76.25 a barrel.
Russia's Deputy Prime Minister Alexander Novak said Russia won't agree on any additional OPEC+ production cuts in crude production at its meeting next week.
Also, Asian stock markets traded lower amid lingering concerns about economic slowdown, and fears of a U.S. debt default rendered the mood bearish. Meanwhile, some relief is seen as lawmakers move closer to a deal to raise debt limit and cap spending for two years.
Reflecting the default concerns, Fitch Ratings placed the United States "AAA" credit on "rating watch negative," signaling downside risks to U.S. creditworthiness.
House Speaker Kevin McCarthy said that some progress had been made but several issues remained unresolved in negotiations, as the deadline ticked closer to raise the federal government's $31.4 trillion borrowing limit or risk default.
With just over a week left - including a holiday weekend - U.S. Treasury Secretary Janet Yellen reiterated her dire warning that the U.S. could have a hard time paying its bills.
In the Asian trading today, the Canadian dollar fell to nearly a 1-month low of 1.3654 against the U.S. dollar and a 9-day low of 1.4648 against the euro, from yesterday's closing quotes of 1.3639 and 1.4627, respectively. If the loonie extends its downtrend, it is likely to find support around 1.37 against the greenback and 1.49 against the euro.
Against the yen and the Australian dollar, the loonie dropped to 102.38 and 0.8885 from yesterday's closing quotes of 102.65 and 0.8873, respectively. On the downside, 99.00 against the yen and 0.91 against the aussie are seen as the next support levels for the loonie.
Looking ahead, U.K. retail sales data for April is due to be released at 2:00 am ET.
In the New York session, Canada preliminary wholesale sales data for April and budget balance report for March, U.S. durable goods orders for April, personal income and spending data for April, U.S. University of Michigan consumer sentiment index for May and U.S. Baker Hughes weekly oil rig count data are slated for release.
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