Canadian dollar piggybacks on higher crude prices
The Canadian dollar has posted gains in Thursday’s North American session. Currently, USD/CAD is trading at 1.2633, down 0.15% on the day. The Canadian dollar has shown sharp gains today, as investors have snapped up the currency following a surprise OPEC announcement which sent oil prices sharply higher. Canada is a major oil producer, and the significant boost in oil prices is excellent news for the Canadian economy. Earlier in the day, USD/CAD fell as low as 1.2557, its lowest level since February 25.
Oil prices jump as OPEC extends cuts
There has been a stunning development at the OPEC+ meeting, attended by OPEC members as well as Russia. OPEC+ announced that it would not hike output in April by 500 thousand barrels, but rather would keep output unchanged by extending the cuts that are currently in place. This means that OPEC+ will hold back some 9.2 million barrels from the market each day, until at least the beginning of May. This move caught the markets completely off guard, sending crude prices to their highest levels in 12 months. Currently, Brent crude has climbed to USD67.54 and WTI is trading at USD65.67.
In other news on the crude oil front, the EIA Crude Oil inventories report showed a record-high surplus of 21.6 million barrels. However, this figure was distorted by the recent Texas storm, which resulted in huge stockpiles due to refiners being unable to take on crude shipments. Prior to today’s EIA release, nine of the past 11 readings have shown drawdowns, and this trend could well continue as the global economy improves and the demand for oil increases.
- There is resistance at 1.2827. Above, we have resistance at 1.2921
- On the downside, USD/CAD put strong pressure on support at 1.2553. This is followed by support at 1.2373
For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/
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