Canadian Dollar Rises As Oil Price Climbs

The Canadian dollar strengthened against other major currencies in the late Asian session on Friday, as the crude oil rallied after the release of stronger-than-expected GDP readings from the U.S.

Thursday, the Commerce Department report showed that the U.S. gross domestic product shot up by 3.3 percent in the fourth quarter after surging by 4.9 percent in the third quarter. Economists had expected GDP to jump by 2.0 percent. stronger than expected U.S. economic growth a

Oil prices rose sharply, continuing to benefit from Wednesday's data showing a larger-than-expected drop in U.S. crude inventory. West Texas Intermediate Crude oil futures for March surged $2.27 or 3 percent at $77.36 a barrel.

Traders looked ahead to today's report on personal income and spending, which could have a significant impact on the outlook for interest rates.

In the late Asian trading today, the Canadian dollar rose to 2-day highs of 1.3463 against the U.S. dollar and 109.75 against the yen, from early lows of 1.3483 and 109.47, respectively. If the loonie extend its uptrend, it is likely to find resistance around 1.33 against the greenback and 111.00 against the yen.

Against the euro, the loonie advanced to a 3-day high of 1.4592 from an early low of 1.4622. On the upside, 1.44 is seen as the next resistance level for the loonie.

The loonie rebounded to 0.8869 against the Australian dollar, from an early low of 0.8882. The loonie rose earlier to a 2-day high of 0.8865. The next possible upside target level for the loonie is seen around the 0.87 region.

Looking ahead, the European Central Bank is slated to issue monetary aggregates for December at 4:00 am ET in the European session.

In the New York session, U.S. Core PCE price index for December, U.S. personal income and spending data for December, pending home sales data for December, Canada budget balance for November and U.S. Baker Hughes oil rig count data are slated for release.