Canadian Dollar Advances As Oil Prices Rally

The Canadian dollar appreciated against its major opponents during the European session on Wednesday, as oil prices rose on strong demand outlook and on the OPEC+ decision to gradually increase production.

Crude for July delivery rose $0.27 to $67.99 per barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed on Tuesday to stick to its plan of monthly production increases until July.

Saudi Energy Minister Prince Abdulaziz bin Salman remarked that a solid demand recovery in the United States and China as well as the acceleration in vaccine rollouts could lead to the further rebalancing of the global oil market.

The likelihood of additional Iranian oil returning to the market has delayed, further supporting oil prices.

Negotiators said that the talks may pause on Thursday and it was unclear if they could resume before Iran's June 18 presidential election.

The loonie spiked higher to a 5-day high of 1.4694 against the euro, after falling to 1.4754 at 3:30 am ET. The loonie may challenge resistance around the 1.44 mark.

The loonie rose to 91.01 against the yen and 0.9316 against the aussie, off its early 2-day low of 90.61 and a 6-day low of 0.9373, respectively. Next near term resistance for the currency is seen around 92.00 against the yen and 0.92 against the aussie.

The loonie recovered to 1.2061 against the greenback, from a 2-day low of 1.2092 seen at 7:20 am ET. Should the loonie strengthens further, it is likely to test resistance around the 1.19 region.

Looking ahead, the Fed Beige book report is set for release in the New York session.