Canadian Dollar Higher On Oil Rally

The Canadian dollar strengthened against its major counterparts on Friday, as investors awaited European Union meeting aimed to establish a recovery fund to respond to the COVID-19 crisis.

EU leaders will meet via teleconference to discuss proposals for a €750 billion, EU-wide Covid-19 recovery fund.

Sentiment improved after Japan lifted the last remaining travel restrictions and a Chinese health expert said that a recent virus outbreak in Beijing is under control.

The currency was underpinned by a rally in oil prices as OPEC producers and their allies promised to meet commitments on cutting supply and two major oil traders said demand was recovering well.

The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil-producing nations on Thursday promised full conformity with oil output cuts from July through September to balance the global oil market.

"Attainment of 100 percent conformity from all participating countries is not only fair and equitable, but vital for the ongoing and timely rebalancing efforts and helping deliver a sustainable oil market stability," the 23-member group said in a statement.

The loonie climbed to 1.3570 against the greenback, from a low of 1.3615 set at 9:00 pm ET. The loonie is seen finding resistance around the 1.33 level.

The loonie edged up to 1.5219 against the euro, after falling to 1.5255 at 12:45 am ET. The loonie is likely to find resistance around the 1.51 level.

Data from Destatis showed that Germany's producer prices declined at the fastest pace in four years in May.

Producer prices fell 2.2 percent year-on-year in May, following a 1.9 percent decline in April. Economists had expected a 2.1 percent decrease. This was the biggest fall since May 2016.

The loonie appreciated to 78.82 against the yen, from yesterday's closing value of 78.66. If the loonie rises further, 80.00 is possibly seen as its next resistance level.

In contrast, the loonie dropped against the aussie, with the pair trading at 0.9341. On the downside, 0.96 is likely seen as the next support level for the loonie.

Canada retail sales for April will be featured in the New York session.