2019.07.1707:25:00UTC+00Canadian Dollar Strengthens On Higher Oil Prices

The Canadian dollar climbed against its major counterparts in the European session on Wednesday, as oil prices advanced after steep losses in the previous session, as Barry weakened to a tropical depression and U.S. Secretary of State Mike Pompeo said Iran was prepared to negotiate about its missile program.

Crude for August delivery rose $0.36 to $57.98 per barrel.

The upside remained capped somewhat after industry data showed a smaller-than-expected decline in U.S. crude inventories.

The American Petroleum Institute reported a small crude oil inventory draw of 1.401 million barrels for the week ending July 11, compared to analyst expectations for a decrease of 2.7 million barrels.

Official data from the U.S. government's Energy Information Administration will be published later today, with analysts expecting another drawdown.

Investors focus on the CPI figures to be released from Statistics Canada, due at 8:30 am ET. Economists expect a drop of 0.3 percent month-on-month, compared to a 0.4 percent rise in May.

The currency has been trading higher against its major counterparts in the Asian session, excepting the greenback.

The loonie rose to 1.4635 against the euro and 1.3053 against the greenback, from its early low of 1.4678 and a weekly low of 1.3094, respectively. If the loonie extends rise, 1.45 and 1.28 are possibly seen as its next resistance levels against the euro and the greenback, respectively.

The loonie gained to a 2-day high of 0.9149 against the aussie, off its previous low of 0.9187. On the upside, 0.90 is possibly seen as the next resistance for the loonie.

Data from Westpac showed that Australia's leading index improved in June but remained consistently negative.

The Westpac- Melbourne Institute Leading Index that indicates likely pace of economic activity over the next nine months, rose to -0.02 percent in June from -0.47 percent in May.

Reversing from its early low of 82.64 against the yen, the loonie climbed to 82.96. The next possible resistance for the loonie is seen around the 85.00 mark.

Looking ahead, Canada manufacturing sales for May and consumer price index for June, as well as U.S. housing starts and building permits for the same month and Federal Reserve's Biege book report are set to be released in the New York session.