The Canadian dollar firmed against its major counterparts in the early European session on Friday, following a rally in oil prices as strong China and U.S. data spurred optimism about the recovery from the pandemic.

Crude for June delivery rose $0.20 to $67.13 per barrel.

Official data showed that China’s gross domestic product expanded 18.3 percent year-on-year in the first quarter of 2021.

That was shy of estimates for a jump of 19.0 percent but was up sharply from the 6.5 percent growth in the fourth quarter of 2020.

Industrial production was up an annual 14.1 percent in March – missing forecasts for a gain of 17.2 percent and slowing from the 35.1 percent growth in February.

Retail sales skyrocketed 34.2 percent year-on-year in the month, exceeding expectations for a gain of 28.0 percent and up from 33.8 percent in the previous month.

Fixed asset investment jumped an annual 25.8 percent, beating forecasts for 25.0 percent while the jobless rate fell to 5.3 percent from 5.5 percent in February.

Better-than-expected U.S. retail sales data and a drop in first-time claims for unemployment benefits backed hopes for a strong economic recovery.

Oil prices were supported by improved oil demand outlook, as the International Energy Agency raised its world oil demand estimate for 2021.

The loonie reversed from an early 8-day low of 86.56 against the yen, rising to 87.05. The loonie is seen finding resistance around the 88.00 mark.

The loonie edged up to 1.2514 against the greenback, after a fall to 1.2559 at 9:00 pm ET. Next key resistance for the loonie is likely seen around the 1.21 level.

The loonie reached as high as 0.9677 against the aussie, following a low of 0.9728 seen at the commencement of today’s deals. If the loonie extends rise, 0.95 is possibly seen as its next resistance level.

After falling to a 2-day low of 1.5020 at 6:45 pm ET, the loonie rose to 1.4973 against the euro. The next possible resistance for the loonie is seen around the 1.48 level.

Looking ahead, Eurozone CPI for March and trade data for February are scheduled for release in the European session.

At 8:15 am ET, Canada housing starts for March will be published.

Canada wholesale sales for February and U.S. housing starts and building permits for March, as well as University of Michigan’s preliminary U.S. consumer sentiment index for April are due out in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com

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