Friendly Gasoline Inventory Report Helps Canadian Dollar Extend Gains

The USD CAD opened sharply lower this morning and extended its losses following a better than expected government energy report.

The USD CAD opened sharply lower this morning and extended its losses following a better than expected government energy report. Gasoline futures rose after the government reported a decrease in inventories triggered by increased demand and a drop in imports. The strength in the gasoline market is helping to support crude oil prices. The crude rally has helped the Canadian Dollar extend its gains versus the U.S. Dollar.

The tone remains bullish for the EUR USD following an early morning report from the International Monetary Fund (IMF) which showed a reduction in its estimated losses from the global financial crisis.

The short-covering rally is continuing in the GBP USD at the midsession. This rally started yesterday when it was announced that U.K. retail sales had increased to its highest level in five months. Additional support was provided by smaller contraction in the U.K. Gross Domestic Product report. Today’s rally is being fueled by the IMF’s announcement of a reduction in the amount of loss it expects from the global financial crisis.

Traders are once again buying the Japanese Yen against the Dollar. Today’s announcement by the IMF is helping to diminish investor fear that the current global economic recovery will increase at a slower pace than previously estimated.

Lower equity markets are helping to limit gains in the higher yielding AUD USD and NZD USD.