Canadian Dollar Continues to Receive Support from Skyrocketing Oil Prices

The Canadian dollar continued to rally against its major rivals today, demonstrating especially big gains against the weak US dollar, as the OPEC oil production cut propelled oil prices higher.

Yesterday’s deal to reduce oil output achieved by members of the Organization of Petroleum Exporting Countries led to a sharp rise of prices for crude. Many skeptics did not believe that such an accord could be achieved, yet not only the OPEC reached an agreement, it convinced Russia to join the cuts, even though ahead of the meeting the non-OPEC producer was talking just about freezing output, not reducing it. While plenty of analysts warn to not be excessively exited by the deal, for now the energy market and related markets celebrate the news, and the Canadian currency joined the party together with other currencies linked to oil (like the Norwegian krone).

Tomorrow’s trading session should be important for the loonie. US non-farm payrolls will be released, affecting the currency market in general, while Canada’s employment data will influence the Canadian currency specifically.

USD/CAD dropped 1% from 1.3436 to 1.3312 as of 19:38 GMT today, trading near the lowest level since the big jump on November 9 when Donald Trump won the US presidential elections. EUR/CAD declined from 1.4224 to 1.4180 while its daily low of 1.4131 was the lowest level in about a year. CAD/JPY rallied from 85.15 to 86.64, touching the high of 85.99 intraday — the strongest level since April 29.

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