(RTTNews) - Friday during early deals, the Canadian dollar dropped against its U.S, European and Japanese counterparts despite a rise in oil price. The loonie thus fell to a 2-day low against the yen.
On the other hand, the Canadian currency recovered from a new multi-week low against the Aussie.
Oil rose toward $71 a barrel today, in line with rising equity markets as economies worldwide appeared to be on the path to recovery.
Hopes that the worst of the recession was over helped oil rise for the third day in a row, with prices set for a slight rise on the week.
U.S. light crude for September delivery was up 32 cents at $70.84 a barrel by 2:21 am ET, having earlier risen by as much as $1.08 to $71.60, adding to a 36-cent gain on Thursday. London Brent crude rose 28 cents to $73.76.
The Canadian dollar, which closed yesterday's trading at 87.77 against the yen fell to a 2-day low of 87.07 in early deals on Friday. The next downside target for the loonie-yen pair is seen around the 86 level.
The Bank of Japan might be required to extend its special funding measures after December if the economic situation fails to improve sufficiently in the bank's judgement, the minutes of the meeting held on July 14 and 15 showed today.
On July 15, the Policy Board unanimously voted to hold the key rate at 0.1% and extended the overnight purchases of commercial papers and corporate bonds to December 31 from September 30.
During early deals on Friday, the Canadian dollar slipped to1.0905 against the U.S. currency. This may be compared to Thursday's North American session close of 1.0876. The near term support for the loonie is seen around the 1.105 level.
Against the euro, the Canadian dollar declined to 1.5556 in early trading on Friday. On the downside, 1.565 is seen as the next target level for the Canadian dollar. At yesterday's close, the euro-loonie pair was quoted at 1.5543.
The Eurostat said Euro-zone's consumer price index or CPI dropped 0.7% year-over-year in July, revised from a 0.6% fall estimated initially. In June, the CPI was down 0.1%. This was the second consecutive month of decline in consumer prices. A year ago, inflation was 4%. On a monthly basis, the CPI dropped 0.7% in July.
At 4:10 am ET Friday, the Canadian dollar reached 0.9153 against the Aussie, moving up from a new multi-week low of 0.9204 hit in Asian deals. If the loonie advances further, it may likely target the 0.912 level. The aussie-loonie pair was worth 0.9165 at Thursday's close.
