2018.04.2510:36:00UTC+00Canadian Dollar Drops As Commodities Weaken

The Canadian dollar declined against its most major counterparts in early New York deals on Wednesday, as commodities fell on the back of a higher dollar, supported by rising yields on U.S. bonds.

The ten-year yield rose above 3 percent for first time since early 2014 in intraday trading on Tuesday before giving back ground.

Concerns that rising inflation may lead the Federal Reserve to hike interest rates faster than previously expected have recently pushed yields higher.

Investors await weekly crude stockpiles data from the Energy Information Administration due at 10:30 am ET.

Yesterday, the American Petroleum Institute reported that U.S. crude inventories rose by 1.1 million barrels to 429.1 million in the week ended April 20.

The Bank of Canada Governor Stephen Poloz along with Senior Deputy Governor Carolyn Wilkins will testify before the Standing Senate Committee on Banking, Trade, and Commerce, in Ottawa later in the day.

The currency has been trading in a negative territory against its major rivals in the European session.

The loonie dropped to 1.2897 against the greenback, its weakest since April 3. The next possible support for the loonie is seen around the 1.30 area.

The loonie fell to more than a 2-week low of 1.5714 against the euro, compared to Tuesday's closing value of 1.5696. If the loonie falls further, it may find support around the 1.58 area.

Figures from Destatis showed that Germany's construction orders grew notably in February.

New orders in the main construction industry climbed 9.9 percent month-over-month in February. Orders surged 13.0 percent in February from a year earlier.

The loonie pared gains to 84.67 against the yen, from a high of 84.99 hit at 9:15 pm ET. The loonie is likely to find support around the 83.00 level.

Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity rebounded at a slower-than-expected pace in February.

The all industry activity index rose 0.4 percent month-over-month in February, reversing a 0.1 percent drop in January. That was just below the expected increase of 0.5 percent.

On the flip side, the loonie rose back to 0.9731 against the aussie, not far from a 5-day peak of 0.9724 hit at 2:00 am ET. The loonie is seen finding resistance around the 0.96 level.