Canadian Dollar Falls As Oil Prices Drop

The Canadian dollar declined against its major counterparts in the European session on Monday, as oil prices dropped on supply worries following a data showing a rise in the U.S. oil rig count for a third consecutive week.

Crude for January delivery fell $0.12 to $57.24 per barrel.

Data from energy services firm Baker Hughes showed that U.S. oil rig count rose by 2 last week, taking the total count to 751, which was the highest since September.

The total oil and gas rigs increased by two to 931 in the week ended December 8.

Investors await cues from key policy meetings of the Federal Reserve, Bank of England, the European Central Bank and the Swiss National Bank due this week.

The FOMC is widely expected to raise policy rates by 25 basis points, while the Bank of England, which hiked rates last month, is hardly in a position to raise rates again when it reviews its monetary policy on Thursday.

Similarly, no change in policy is expected from the European Central Bank and the Swiss National Bank.

The loonie showed mixed trading in the Asian session. While it rose against the yen and the greenback, it held steady against the euro. Against the aussie, the currency dropped.

The loonie dropped to 4-day lows of 1.5160 against the euro and 0.9678 against the aussie, from its early highs of 1.5119 and 0.9644, respectively. On the downside, 1.54 and 0.98 are likely seen as the next support levels for the loonie against the euro and the aussie, respectively.

The loonie retreated to 1.2851 against the greenback and 88.21 against the yen, from its previous highs of 1.2831 and 88.45, respectively. If the loonie extends decline, it may locate support around 1.30 against the greenback and 87.00 against the yen.