Canadian dollar sets fresh multi-month highs versus euro and Aussie

In trading against its major counterparts, the Canadian dollar staged a sharp rise on Tuesday morning in New York as oil prices inched higher on concerns over Hurricane Gustav.

The loonie surged to new multi-month highs versus the Australian dollar and the euro. At the same time, the Canadian dollar rose to near a 3-week high versus the greenback and a 25-day high versus its Japanese counterpart in the mid-morning trading on Tuesday. Light sweet crude for October delivery added $2.29 to reach $117.40 a barrel on Tuesday morning. Prices had dropped as low as $112.36 in electronic trading. The oil prices climbed on concern that Gustav strengthened to a Category 3 hurricane as it headed towards Haiti on Tuesday morning. Some forecasts see the storm heading into the Gulf of Mexico, which could threaten the oil region. The Canadian dollar advanced to near a 3-week high of 1.0415 against the US dollar by 10:15 am ET. This may be compared to the previous session's 5-day high of 1.0564 that hit around 5:40 am. The greenback-loonie pair is currently quoted at 1.0431. According to a latest report from the U.S, the S&P/Case-Shiller national home price index dropped a record 15.4% in the second quarter compared to the same period last year. The Case-Shiller 10-city posted a record year over year decline of 17% and 20-city indexes were down 15.9%. Economists were expecting the second quarter home price index to drop 16.2%. At the same time, the Department of Commerce released its report on new home sales in July, showing that new home sales surged up 2.4% to an annual rate of 515,000 in July from the revised June rate of 503,000. Economists had expected sales to fall to a rate of 525,000 from the rate of 530,000 originally reported for June. Meanwhile, the US Conference Board said today that its consumer confidence index jumped to 56.9 in August from an unrevised 51.9 in July. The increase came in well above the expectations of economists, who had expected the index to edge up to 53.0. Against the yen, the Canadian loonie edged up to a 25-day high of 105.46 by 10:40 am ET. This may be compared to today's early Asian session low of 103.76. As of now, the loonie-yen pair is worth 105.36. The Bank of Japan said today that the corporate service price index, which measures corporate prices of communications, transportation and advertising, climbed 1.3% on year in July. The figure fell slightly below analysts expectations that were looking for an increase of 1.4% on year and it was up from the 1.2% annual increase in June. On month, the index eased 0.1%. The Canadian dollar surged to a 5-1/2 month high of 1.5267 versus the euro by 10:35 am ET, compared to today's early European session low of 1.5428. The pair traded as German business confidence declined to 94.8 in August from 97.5 in July. Economists had expected the index to fall to 97.2. As of now, the euro-loonie pair is trading at 1.5308. Traders also weighed a detailed report from the Federal Statistical Office that the German economy contracted 0.5% sequentially in the second quarter, after expanding 1.3% in the first quarter. Against the Aussie, the loonie ticked up to a 6-1/2 month high of 0.8925 by 10:15 am ET. The Aussie-loonie pair that closed yesterday's trading at 0.9074 is currently quoted at 0.8945. Copyright(c) 2008 RealTimeTraders.com, Inc. All Rights Reserved