2019.12.2610:51:00UTC+00Canadian Dollar Advances On Higher Oil Prices

The Canadian dollar strengthened against its major counterparts in the European session on Thursday, amid optimism over OPEC output reduction deal that would take effect from January 1.

Crude for February delivery rose $0.13 to $61.24 per barrel.

OPEC and its allies are set to curb their production by an additional 0.5 million barrels per day beginning from January 1.

Investors expect that OPEC-led efforts could constrain supply and help balance the market.

Further underpinning oil prices were optimism over the U.S.-China trade deal that is expected to be signed in early January.

On Tuesday, U.S. President Donald Trump said that he and Chinese President Xi Jinping will have a signing ceremony for the Phase 1 agreement to end their trade dispute that was put together earlier this month.

Meanwhile, trading activity is subdued as markets in Europe are closed for Christmas and Boxing Day holidays.

The loonie rose to 0.9101 against the aussie, from a low of 0.9116 seen in the pre-European session. The loonie is seen facing resistance around the 0.90 mark.

The loonie appreciated to a 3-day high of 83.34 against the yen, from a low of 83.05 hit at 1:45 am ET. The currency may locate resistance around the 85.00 region, if it rises again.

Data from Bank of Japan showed that Japan's services producer prices increased at a steady pace in November.

Services producer prices increased 2.1 percent year-on-year in November, the same rate of increase as seen in October.

Rebounding from its early lows of 1.3165 against the greenback and 1.4593 against the euro, the loonie edged higher to 1.3149 and 1.4571, respectively. The next possible resistance for the loonie is seen around 1.30 against the greenback and 1.44 against the euro.

Looking ahead, U.S. weekly jobless claims for the week ended December are due in the New York session.