Canadian Dollar Advances Amid Risk Appetite, Oil Rally

The Canadian dollar firmed against most major opponents in early European trading on Wednesday amid risk appetite, as investors focused on the formal move by the U.K. to leave the European Union, and as oil prices rallied on disruptions to Libyan crude production and a more positive OPEC attitude towards extending production cuts.

Crude for May delivery rose $0.35 to $48.72 per barrel.

British Prime Minister Theresa May on Tuesday signed the historic letter invoking Article 50 that will be sent to the European Union later today. There will be a two-year negotiating window before Britain actually leaves the bloc.

Investors shifted their focus from the failure of U.S. President Donald Trump's healthcare plan to the strong fundamentals of the U.S. economy.

Oil prices extended overnight gains following the disruption to Libyan oil production due to militia activity and after the OPEC officials suggested that the cartel could extend its current deal beyond June.

The loonie showed mixed performance in the Asian session. While the loonie held steady against the yen and the euro, it dropped against the aussie and the greenback.

The loonie edged up to 1.3358 against the greenback and 83.18 against the yen, from its early lows of 1.3401 and 82.93, respectively. The next possible resistance for the loonie may be found around 1.30 against the greenback and 85.00 against the yen.

The loonie firmed to a 5-day high of 1.4405 versus the euro, off its previous low of 1.4491. If the loonie extends rise, 1.43 is likely seen as its next resistance level.

Figures from Destatis showed that Germany's import prices increased at the fastest pace in nearly six years in February.

Import prices climbed by more-than-expected 7.4 percent year-on-year in February, the highest rise since April 2011, when prices surged 7.6 percent.

The loonie held steady against the aussie with the pair trading at 1.0232, following a weekly decline to 1.0241 early in the Asian session. The pair finished Tuesday's trading at 1.0216.

Looking ahead, U.S. pending home sales data for February is set for release in the New York session.

Chicago Fed President Charles Evans speaks about the current economic conditions and monetary policy at the International Capital Markets Conference in Frankfurt at 9:20 am ET.

Boston Fed President Eric Rosengren speaks on the economic outlook before members of the Boston Economic Club and Federal Reserve staff at 11:30 am ET.

European Central Bank Executive Board Member Peter Praet delivers speech at the "2017 Harvard Law Europe - US Symposium on International Financial Systems" in Frankfurt in 12:50 pm ET

San Francisco Fed President John Williams will speak on "From Sustained Recovery to Sustainable Growth: What a Difference Four Years Makes" before the Forecasters Club of New York at 1:15 pm ET.