Canadian Dollar Advances As Oil Prices Strengthen

The Canadian dollar climbed against its most major counterparts in early New York deals on Wednesday, as oil prices rose following an industry data showing a draw in gasoline stockpiles last week and investors await official data on crude supplies due shortly.

Crude for September delivery rose $0.10 to $46.69 per barrel.

Data from American Petroleum Institute showed a drop of 5.4 million barrels in gasoline supplies for the week ending July 14, far higher than analysts' expectations for a fall by 500,000 barrels.

Distillate inventories fell by 2.9 million barrels, compared to expectations for a 700,000-barrel draw.

However, U.S. crude stockpiles rose by 1.628 million barrels last week, defying forecasts for a draw of 3 million barrels.

The Energy Information releases oil inventory data at 10:30 am ET, with analysts expecting a drop in crude stocks by 3.2 million barrels.

A joint meeting between OPEC and non-OPEC producers, including Saudi Arabia and Russia, is scheduled in Russia next week, at which the delegates will discuss compliance with production cuts and the current situation in the oil market.

In economic news, Canada's manufacturing sales increased for the third consecutive month, up 1.1% to $54.6 billion in May. The gain was mainly attributable to higher sales in the transportation equipment and chemical manufacturing industries.

The loonie has been trading higher against its major rivals in the European session, with the exception of the yen.

The loonie recovered to 0.9993 against the aussie, off its early low of 1.0035. If the loonie rises further, 0.98 is likely seen as its next resistance level.

The latest survey from Westpac Bank showed that a leading index for the Australian economy continued to show pessimism in June, and at a sharper rate.

The index was down 0.14 percent after easing an upwardly revised 0.01 percent in May.

The loonie reversed from an early low of 1.2652 against the greenback, advancing to over a 1-year high 1.2579. Continuation of the loonie's uptrend may see it challenging resistance around the 1.23 region.

The loonie hit a 2-day high of 1.4505 against the euro, from a low of 1.4593 hit at 6:00 pm ET. On the upside, 1.43 is possibly seen as the next resistance level for the loonie.

Data from Eurostat showed that Eurozone construction output declined in May after recovering in April.

Construction output fell 0.7 percent in May from April, when it rose 0.3 percent. Civil engineering slid 0.9 percent and building construction dropped 0.6 percent in May.

On the flip side, the loonie fell to 88.51 against the yen, from an early high of 88.89. The next possible support for the loonie is seen around the 86.00 mark.

The Japanese government maintained its economic view, reiterating that the economy is on a moderate recovery.

The government retained its view on private consumption, business investment, exports, industrial production and corporate profits. Assessment of employment and consumer prices were also kept unchanged.