Loonie Higher As Oil Jumps After Saudi, Russia Back Supply Cut Extension

The Canadian dollar drifted higher against its most major counterparts in the early European session on Monday, as oil prices rallied after Saudi Arabia and Russia jointly committed to extend supply cuts until March 2018.

Crude for June delivery rose $1.17 to $49.01 per barrel.

Speaking on sidelines of an economic summit in China, Saudi Energy Minister Khalid Al-Falih and Russian Energy Minister Alexander Novak said that they had agreed to extend the production cut deal by another 9 months, as a part of their efforts to rebalance the global crude market.

The ministers signaled that the new deal would have the same quota of cuts as per existing deal and would be proposed at the OPEC meeting on May 25.

Meanwhile, investors took weak Chinese data, geopolitical worries and the WannaCry ransomware cyberattack in their stride.

The loonie rose against its major rivals in the Asian session, with the exception of the aussie.

The loonie firmed to 1.3626 against the greenback, its strongest since April 28. The loonie is likely to locate resistance around the 1.35 mark.

The loonie bounced off to 1.4899 against the euro, from an early weekly low of 1.5000. The next possible resistance for the loonie is seen around the 1.48 area.

Reversing from an early low of 82.54 against the Japanese yen, the loonie hit a 4-day high of 83.43. Continuation of the loonie's uptrend may see it challenging resistance around the 84.5 level.

Data from the Bank of Japan showed that Japan's producer prices rose 0.2 percent on month in April.

That was unchanged from the March reading, and it surpassed expectations for a decline of 0.1 percent.

On the flip side, the loonie eased back to 1.0141 against the aussie, from a high of 1.0112 hit at 11:15 pm ET. The pair finished last week's trading at 1.0126.

Looking ahead, Canada existing home sales for April, U.S. NAHB housing market index and New York Fed's empire manufacturing survey for May are set for release in the New York session.