Renewed OPEC Hopes And Month End Featured

Yesterday’s pessimism about a potential deal at today’s oil producers’ meeting in Vienna has been replaced by optimism and that crude oil around 5%. Supportive comment by Iranian officials about there being acceptable proposals on the table and intimations that Russia may also participate in cuts fanned the newfound hopes.  

Still, there is some moving parts.Iran has continued to indicate that freezing its own output is not on the agenda.It is not clear that that would satisfy the Saudis.Over the past year, the dispute between Saudi Arabia and Iran has been a major stumbling block preventing agreement.  

The sharp rise in oil prices is helping lift some oil-sensitive currencies, like the Russian ruble, the strongest of the emerging market currencies today. The Mexican and Colombian pesos may also be supported. Among the majors, the surge in oil is giving the Norwegian krone a fillip; any may be helping Canadian dollar hold on to yesterday’s gains. The US dollar is holding just above CAD1.34. It has not been below CAD1.3380 since the US election.  

Against most of the major currencies, the US dollar is little changed. The greenback is strongest against the yen, gaining nearly 0.5%. It held JPY112.00 in early Asia and poked through JPY113 in the European morning, which appears to have largely exhausted the technical scope. The euro is holding on to the bulk of yesterday’s gains; finding support near $1.0620, but unable to make much headway toward Monday’s high near $1.0680. Sterling looks a bit heavier than the euro, but support near $1.2450 remains intact. The results of the BOE stress test showed only one bank having to bolster its capital plans and two other banks slight inadequate results. This may have weighed on the financials, but has prevented a broader equity advance in the UK, led by energy and consumer staples.