2023.12.2611:48:00UTC+00Canadian Dollar Climbs In Thin Trade

The Canadian dollar traded higher against its major counterparts in the European session on Tuesday, as tensions in the Middle East and optimism about interest rate cuts in the U.S. lifted oil prices.

Crude for February delivery rose $0.03 to 73.58 per barrel.

Traders eyed Middle East tensions amid no end in sight to Israel's war on Gaza.

Israeli Prime Minister Benjamin Netanyahu said war will not stop and he is ready to encourage Palestinians in Gaza to leave the enclave.

Earlier, there were reports that the U.S. had launched strikes against targets in Iraq linked to Kataib Hezbollah following a drone attack on U.S. forces in Erbil.

Cooler-than-expected inflation data released last week raised the possibility of Fed rate cuts early next year.

The loonie rose to 107.53 against the yen, 1.4585 against the euro and 1.3244 against the greenback, off its early lows of 107.30, 1.4622 and 1.3263, respectively. The currency is poised to find resistance around 110.00 against the yen, 1.44 against the euro and 1.30 against the greenback.

The loonie was trading at 0.9019 against the aussie, recovering from an early low of 0.9031. On the upside, 0.85 is likely seen as its next resistance level.

Looking ahead, FHFA's house price index and S&P/Case-Shiller home price index for October will be featured in the New York session.