Canadian Dollar Slides Amid Falling Oil Prices, Risk Aversion

13/10/2014 08:10 AST

The Canadian dollar weakened against most major currencies in the Asian session on Monday following a slide in oil prices amid expectations of lukewarm demand and the general risk aversion.

Crude oil for November delivery are currently down $1.05 to $84.77 a barrel. The oil prices plunged as investors continued to fret over demand growth with evidence of a supply glut, on increased output from the U.S., Russia, and the OPEC.

Last Friday, the OPEC (Organisation of Petroleum Exporting Countries) warned that warmer winter weather is expected to hit the already dwindling demand.

In its monthly oil market report published on Friday, the OPEC said its oil production rose by 402,000 barrels a day last month to total 30.47 million barrels a day. This is the highest level of output since the summer of 2013, as big producers continued to lift production despite global economic headwinds.

Meanwhile, Iran cut prices for its customers, just days after Saudi Arabia's Aramco did the same.

Asian stocks are continuing risk aversion on global growth concerns.

The Canadian dollar was higher against other major currencies in New York trading last Friday after data showed that the unemployment rate for Canada fell in September.

Data from Statistics Canada showed unemployment rate to have declined to a seasonally adjusted 6.8 percent in September, the lowest level since December 2008, after coming in at 7 percent last month.

Last Friday, the Canadian dollar rose 0.48 percent against the euro and 1.05 percent against the Australian dollar.

Meanwhile, in the Asian session, the Canadian dollar has fallen to nearly a 1-1/2-month low of 95.58 against the yen from last week's closing quote of 96.10. If the loonie extends its downtrend, it is likely to find support around the 94.00 area.

Against the euro, the loonie edged down to 1.4218 from last week's closing quote of 1.4128. The loonie is likely to find support near the 1.43 region.

Pulling away from a multi-month high of 0.9684 against the Australian dollar, the loonie edged down to 0.9793. On the downside, 0.98 is seen as the next support level for the loonie.

Looking ahead, German wholesale price index for September is due to be released at 2:00 am ET.

RTT News