Canadian Dollar Advances As Oil Prices Rise

The Canadian dollar climbed against its major counterparts in the European session on Monday, as progress in U.S. stimulus package and the approval of Johnson & Johnson's single shot Covid-19 vaccine lifted oil prices.

The U.S. House passed the $1.9 trillion coronavirus relief package on Saturday. The bill now moves to the Senate, where a vote could happen as early as next week.

The U.S. FDA on Saturday authorized Johnson & Johnson's single-shot Covid-19 vaccine for emergency use, beginning the rollout of millions of doses of a third effective vaccine that could reach Americans by early next week.

Traders await the OPEC+ meeting due this week, which is likely to raise production amid falling inventories.

Analysts expect the coalition to increase output by 500,000 barrels a day next month.

The loonie edged up to 84.25 against the yen, from a low of 83.60 seen at 5:00 pm ET. The loonie may find resistance around the 86.00 level.

The latest survey from Jibun Bank showed that the manufacturing sector in Japan climbed into expansion territory in February, with a 22-month high manufacturing PMI score of 51.4.

That's up from 49.8 in January and it moves above the boom-or-bust line of 50 that separates expansion from contraction.

The loonie recovered to 1.2671 against the greenback and 0.9802 against the aussie, from its early lows of 1.2737 and 0.9863, respectively. The loonie is likely to face resistance around 1.25 against the greenback and 0.96 against the aussie.

The loonie was up against the euro, at a 4-day high of 1.5262. On the upside, resistance is likely seen near the 1.50 level.

Looking ahead, U.S. ISM manufacturing PMI for February and construction spending for January are set for release in the New York session.