Canadian Dollar Climbs As Oil Prices Rise On OPEC Hopes

The Canadian dollar advanced against its major rivals in the European deals on Thursday, as oil prices rose amid media reports that OPEC is likely to extend its supply quota deal by nine months through the end of 2018.

Crude for January delivery rose $0.45 to $57.75 per barrel.

Saudi Arabia oil minister Khalid al-Falih told reporters that he opts for a nine-month extension of existing cuts and wants support from other countries.

"Market stability has improved and the sentiment is generally upbeat. The rebalancing trend has accelerated and inventories are on a generally declining trend," he said.

Wednesday's U.S. inventories data showing a significant decline in domestic inventories also propped up oil prices.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the previous week.

This follows a decline of more than 6 million barrels the previous week, and contrasts this week's report from the American Petroleum Institute which showed a surprising build in stockpiles.

Investors also awaited the U.S. Senate vote on major tax reform bill due today or tomorrow. The chamber cleared a procedural vote on Wednesday by a margin of 52-48 to begin formal debate on tax legislation.

The currency traded mixed in the Asian session. While it fell against the euro and the aussie, it rose against the yen. Against the greenback, it held steady.

The loonie recovered to 1.2876 against the greenback, from an early new 4-week low of 1.2902. If the loonie rises further, 1.27 is possibly seen as its next resistance level.

The loonie bounced off to 87.24 against the yen, from a low of 86.94 hit at 5:00 pm ET. This may be compared to a 3-day high of 87.29 hit at 4:15 am ET. Next key resistance for the loonie-yen pair is seen around the 88.00 region.

Data from the Ministry of Land, Infrastructure, Transport and Tourism showed that Japan's housing starts declined for the fourth straight month in October, and at a faster-than-expected pace.

Housing starts fell 4.8 percent year-on-year in October, bigger than September's 2.9 percent decrease. That was also above the 2.8 percent drop economists had forecast.

Following a 3-week low of 0.9765 hit at 12:45 am ET, the loonie rose back to 0.9736 against the aussie. The loonie is seen finding resistance around the 0.96 mark.

On the flip side, the loonie weakened to a 1-1/2-year low of 1.5288 against the euro, off its early high of 1.5224. On the downside, 1.55 is possibly seen as its next support level.

Flash data from Eurostat showed that Eurozone inflation increased in November largely due to higher energy prices.

Consumer prices advanced 1.5 percent year-on-year in November, following October's 1.4 percent increase. Inflation was forecast to rise to 1.6 percent.