Canadian Dollar Rises As OPEC Debates Deeper Production Cuts
December 05 2019 - 3:48AM
RTTF2
The Canadian dollar drifted higher against its major
counterparts in early New York deals on Thursday amid higher oil
prices, as the OPEC meets in Vienna to discuss steeper production
cuts to reduce supply glut in the market.
Crude for January delivery rose $0.26 to $58.69 per barrel.
Sources say that Saudi Arabia and Venezuela are proposing
additional production cuts of 500,000 barrels per day from their
current level of 1.2 million bpd.
If agreed, the output quota would be raised to 1.7 million
barrels from 1.2 million barrels.
On Friday, the cartel will hold a meeting with Russia and other
producers, a group known as OPEC+
A report from the Energy Information Administration released on
Wednesday showed a steeper than expected weekly drop in crude oil
inventories.
Crude oil inventories tumbled by 4.9 million barrels in the week
ended November 29th compared to estimates for a decrease of about
1.7 million barrels.
Data from Statistics Canada showed that Canada's trade deficit
narrowed more than expected in October.
Trade deficit narrowed to C$1.1 billion in October from C$1.2
billion in September. Economists had forecast a C$1.4 billion
shortfall.
Exports rose 0.8 percent in October, while imports increased 0.5
percent.
The loonie strengthened to more than a 4-week high of 1.3158
against the greenback and near a 4-week high of 82.76 against the
yen, from its early lows of 1.3203 and 82.42, respectively. Next
immediate resistance for the loonie is seen around 1.30 against the
greenback and 83.5 against the yen.
Reversing from its early lows of 0.9042 against the aussie and
1.4628 against the euro, the loonie climbed to a 3-day high of
0.8982 and an 8-day high of 1.4598, respectively. If the loonie
rises further, 0.88 and 1.44 are likely seen as its next resistance
levels against the aussie and the euro, respectively.
Looking ahead, U.S. factory orders for October and Canada Ivey
PMI for November are scheduled for release in the New York
session.
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