Currencies dependent on commodities were higher after oil prices rebounded and Chinese markets appear to have stabilized for the time being.
Brent crude futures rose over one dollar at $58.1 as traders booked profits and closed short positions. The imminent signing of the Iran nuclear deal is likely to add to oversupply but this has already been factored into current prices.
This week’s stocks report is expected to show that crude supplies fell by 2.07M barrels to the end of last week.
The Bank of Canada will meet tomorrow to decide interest rates. Rates are expected to be held at 0.75%. However following January’s surprise interest rate cut markets have been positioning cautiously.
USD/CAD is currently at 1.2748 after the greenback has forced relentlessly higher over the past three weeks.
Stability in commodities also helped push the Australian dollar upwards. AUD/USD lifted nearly one percent to 0.7446. Resistance is currently at 0.7406 which coincides with the 50-hour moving average. Due later on Wednesday is the Australian Westpac consumer confidence report. Markets are looking for an improvement of last month’s disappointing reading of minus 6.9% and this should lift sentiment.