Canadian Dollar Advances Amid Rising Risk Appetite

The Canadian dollar climbed against its most major counterparts in the Asian session on Monday amid rising risk appetite, as Asian shares rose following positive close on Wall Street Friday after Federal Reserve Chairman Jerome Powell said that the strength of the U.S. economic expansion justified gradual interest rate hikes.

At the Jackson Hole Symposium in Wyoming, Powell said, "As the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate."

The People's Bank of China announced that it was changing its methodology for fixing the yuan's daily midpoint in order to keep the currency market stable.

The central bank said it was resuming use of a "counter-cyclical factor" for fixing the yuan's daily mid-point, which would help the currency remain stable.

The loonie climbed to a 4-day high of 1.3007 against the greenback, compared to 1.3025 hit late New York Friday. On the upside, 1.28 is likely seen as the next resistance level for the loonie.

The loonie edged up to 1.5108 against the euro, from a low of 1.5159 hit at 7:45 pm ET. The loonie is likely to challenge resistance around the 1.50 level.

Reversing from an early low of 0.9555 against the aussie, the loonie rose to 0.9522. The next likely resistance for the loonie is seen around the 0.93 level.

Meanwhile, after advancing to near a 3-week high of 85.58 against the yen at 8:15 pm ET, the loonie dropped to 85.20 and held steady thereafter. The loonie is poised to find support around the 84.00 level.

Looking ahead, German Ifo business climate index for August is due in the European session.