Reports from the OPEC meeting are emerging and it seems that the member states are unable to agree on a reduction in production despite the falling oil prices.
Oil prices could further decline and this could add pressure to the already sensitive Canadian dollar.
Member states such as Saudi Arabia have exceeded quotas in the past, but everyone seemed to be happy when oil prices were stable and high and everybody was making money. In addition, the share of OPEC’s oil in global production has been falling in the past decades, and most recently with the shale oil and gas revolution in the United States.
The Canadian dollar moves on domestic economic indicators, expectations from the Bank of Canada and demand from the United States. Oil prices also have a role. Even though this role isn’t that big, the C$ is an a tight spot and every little push could take it to multi-year highs.
Following the excellent Non-Farm Payrolls report in the US, the greenback stormed the board and the loonie could not withstand the pressure.
The Canadian dollar tumbled down. USD/CAD reached a high of 1.1270, just a few pips from the peak of 1.1277 seen earlier in the year.
Beyond this line, its back to levels last seen in early 2009.
Can this happen early in the week, when trading liquidity is thin? We’ll know soon enough. Later on, Canada’s jobs report is the main event.
Stay tuned for the upcoming Canadian dollar forecast.
