Canadian Dollar Rises; BoC Governor Says Canadian Economy Is On Track For A Soft Landing

(RTTNews) - The Canadian dollar strengthened against other major currencies in the Asian session on Tuesday, after the Bank of Canada Governor Tiff Macklem said the Canadian economy is on track for a soft landing.

Speaking at the Winnipeg Chamber of Commerce on late Monday, the Bank of Canada governor Tiff Macklem said the Canadian economy appears to be on track for a soft landing where inflation falls back to the bank's target without a major spike in unemployment.

"We continue to think that we don't need a large rise in the unemployment rate to get inflation back to the 2% target," Macklem said.

The crude oil prices gained on optimism about the outlook for demand and likely supply disruptions due to tensions in the Middle East. West Texas Intermediate Crude oil futures for August rose $0.90 or 1.1 percent at $81.63 a barrel.

Asian stock markets traded higher, as traders seemed cautious and reluctant to make significant moves ahead of some crucial economic data, including a report on U.S. personal income & spending due later in the week. They also await comments from U.S. Fed officials for additional clues on the outlook for interest rates.

Traders are also looking ahead to the presidential debate between Joe Biden and Donald Trump as well as upcoming French and U.K. elections later in the week.

In the Asian trading today, the Canadian dollar rose to a 3-week high of 1.3641 against the U.S. dollar, from yesterday's closing value of 1.3654. The USD/CAD may test resistance around the 1.35 region.

Against the euro and the Australian dollar, the loonie advanced to 1.4647 and 0.9083 from early lows of 1.4660 and 0.9094, respectively. If the loonie extends its uptrend, it is likely to find resistance around 1.45 against the euro and 0.88 against the aussie.

The loonie edged up to 116.94 against the yen, from Monday's closing value of 116.84. On the upside, the CAD/JPY pair may test resistance around the 117.00 region.

In economic news, producer prices in Japan were down 0.1 percent on month in May, the Bank of Japan said on Tuesday. That follows the 0.7 percent monthly jump in April. On a yearly basis, producer prices were up 2.5 percent, easing from 2.7 percent in the previous month.

Looking ahead, Canada May CPI data and manufacturing sales data for May, U.S. Chicago Fed national activity index for May, U.S. Redbook report, U.S. house price index for April, U.S. Consumer Board's consumer confidence for June, U.S. Richmond Fed manufacturing index for June and U.S. Dallas Fed services index for June are slated for release in the New York session.