Canadian Dollar Surges Against Euro Following OPEC’s Output Cut

The Canadian dollar rose against the euro on Wednesday, as a surge in oil prices supported the currency of the oil exporting nation.

The Organization of the Petroleum Exporting Countries concluded a meeting in Vienna today, which was closely watched by traders to look for signs of a possible agreement to cut production. The organization announced that a deal was reached between its member countries. According to this deal, which is the first since 2008, OPEC’s collective production will be reduced by 1.2 million barrels per day to 32.5 million barrels a day.

The agreement, which comes in effect in January, will allow Iran to have its production at pre-sanctions level, while Saudi Arabia will take in a big reduction to its output levels. By reaching this agreement, OPEC is bringing a policy of unlimited production that was introduced in 2014 to an end. Crude prices sharply gained following the news, which allowed the Canadian dollar to erase all its losses against the euro on Tuesday.

The Canadian currency’s rise was further stoked by a report released today by Statistics Canada, which showed that gross domestic product rose by 0.9% in the third quarter of 2016, even after declining by 0.3% in the second quarter.

The EUR/CAD moved down to 1.4208 at 18:35 GMT, after touching 1.4189 at 14:15 GMT, the lowest level since November 28. The pair opened trading today at 1.4308.

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