Canadian Dollar Extends Gain As Oil Prices Rebound

The Canadian dollar extended gain against most major currencies in the Asian session on Friday, as commodity currencies got a boost after the Federal Reserve provided an upbeat assessment for the U.S. economy and said it would remain "patient" in its approach to raise interest rates. Oil prices rebounded, after posting sharp losses yesterday. Crude oil for February delivery is currently up $0.52 to $54.88 a barrel.

The Federal Reserve said Wednesday it will "be patient" in determining when to raise interest rates, a subtle change in language from its previous vow to keep rates near zero for a "considerable time."

A report that oil companies are moving to put plans for new production on hold and to cut spending in response to the oil crisis, also contributed to the upmove of the currency.

Traders await the release of Canada CPI data for November and retail sales data for October due later in the day.

Traders await the release of Canada CPI data for November and retail sales data for October due later in the day.

On Thursday, the Canadian dollar rose 2.20 percent against the euro, 0.71 percent against the yen and 0.02 percent against the Australian dollar.

In the Asian trading today, the Canadian dollar rose to a 9-day high of 1.4204 against the euro and a 1-week high of 103.12 against the yen, from yesterday's closing quotes of 1.4222 and 102.62, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.41 against the euro and 104.67 against the yen.

Against the greenback, the loonie advanced to a 2-day high of 1.1566 from yesterday's closing value of 1.1574. Continuation of bullish trend may lead the loonie to a resistance around the 1.14 mark.

Looking ahead, Bank of Japan Governor Haruhiko Kuroda is due to hold a post meeting press conference at 1:30 am ET. The bank opted to hold monetary policy unchanged. At 2:00 am ET, German GfK consumer sentiment index for January and producer price index for November are due to be released.

In the European session, Eurozone current account data for October and U.K. public sector net borrowing for November are set to be published.