Oil and China keeps Canadian dollar under renewed pressure

CAD$ continue to depreciate against major peers in the start of the new week. Uncertainty in China economy as well as falling oil prices are responsible for such free fall of Canadian dollar.

Chinese inflation figures released Saturday showed the CPI rising 1.6% year-on-year in December, weaker than the 1.7% increase forecast by analysts, but better than the 1.5% rise recorded for November. In contrast, the government had a rough inflation target of 3% in 2015. Volatility was exacerbated when Chinese officials devalued the yuan heavily three days in a row last week.

Moreover Oil hit 12 year low on last Friday. WTI futures closed the week 10.48% lower at $33.16 per barrel, compared to the closing price of $37.04 per barrel recorded on December 31. The benchmark hit its weakest level since December 2003 on Thursday, with the price of $32.10 per barrel.

Currently USDCAD is supported above $1.4150 levels. To the top side, resistance levels are seen at 1.4202 and 1.4265 levels. Alternatively support levels are seen at 1.4118, 1.4058 levels.