Canadian Dollar Climbs As Oil Prices Rally On US-China Truce

The Canadian dollar drifted higher against its major counterparts in Asian deals on Monday, as oil prices rose after the U.S. and Chinese presidents agreed to a temporary truce in the clash between the world's two largest economies.

Crude for January delivery rose $2.69 to $53.62 per barrel.

U.S. President Donald Trump promised to suspend new tariffs on Chinese products, meaning that no additional tariffs will be imposed after January 1.

As part of the deal, China will increase its purchase of American farm produce, energy and some industrial goods so as to reduce the trade deficit between the two countries.

China manufacturing activity accelerated slightly in November, the latest survey from Caixin revealed today with a manufacturing PMI score of 50.2.

That exceeded expectations for a score of 50.1, which would have been unchanged from the October reading.

The loonie advanced to a 1-week high of 1.3188 against the greenback and more than a 2-week high of 86.06 against the yen, from its early lows of 1.3268 and 85.61, respectively. The next possible resistance for the loonie is seen around 1.30 against the greenback and 87.5 against the yen.

The loonie edged up to 0.9716 against the aussie, off its early more than a 4-month low of 0.9775. On the upside, 0.96 is possibly seen as the next resistance level for the loonie.

Data from the Australian Bureau of Statistics showed that Australia building approvals fell a seasonally adjusted 1.5 percent on month in October, coming in at 17,070.

That was in line with expectations following the 3.3 percent increase in September.

The loonie strengthened to a 6-day high of 1.4989 against the euro, from its early low of 1.5042. The loonie is likely to find resistance around the 1.48 level.

Looking ahead, Swiss retail sales for October and PMIs from major European economies are due in the European session.

At 8:00 am ET, Federal Reserve Governor Randal Quarles speaks about the economic outlook and monetary policy at the Council on Foreign Relations in New York.

New York Fed President John Williams will give opening remarks at The Evolving Structure of the US Treasury Market conference hosted by the Federal Reserve Bank of New York at 9:15 am ET.

In the New York session, U.S. construction spending for October and ISM manufacturing for November are set for release.