Canadian Dollar Climbs Against British Pound on Improving Oil Prices

The Canadian dollar was boosted against the British pound on Wednesday. The commodity currency has been supported by rising oil prices since the Organization of the Petroleum Exporting Countries announced that a deal to cut oil output was made in its meeting last week.

The oil cartel’s long awaited agreement is the first of its kind in 8 years, and it aims to improve oil prices by reducing the organization’s collective daily production by 1.2 million barrels per day. This comes after two years of low oil prices that were caused by a supply glut, which sharply pushed prices down near the end of 2014 to touch levels lower than $30 per barrel by early 2015. OPEC’s deal comes into effect in January 2017.

Meanwhile, the Bank of Canada decided to keep its benchmark interest rate without a change at 0.5% earlier today, which further supported the nation’s currency. The central bank stated that economy has been showing a growth rate that is well in accordance with expectations, however exports are still disappointing. The bank added that that the economic growth is expected to moderate in the next year.

Brexit remained the dominant focus in the United Kingdom. The movement of the British pound has been closely following Brexit news, with the latest coming from Secretary of State for Brexit David Davis, who said the UK might contribute to the European Union’s budget. The move would be in exchange for a full access to the European single market.

GBP/CAD traded at 1.6688 as of 19:06 GMT on Wednesday, after touching 1.6679 at 17:52 GMT, the pair’s lowest level since November 30. GBP/CAD opened trading today at 1.6831.

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