CAD Soars as Canada Announces Unprecedented Measures
CAD Analysis and News
- Canada Cuts Oil Production
- Trade Truce Boosts Risk Appetite
See our Q4 FX forecast to learn what will drive major currencies throughout the quarter.
Canada Cuts Oil Production
The Canadian Dollar has surged against the greenback with USDCAD shedding 0.9%. Among the main factors behind the bid in the Loonie was on reports that Canada would take unprecedented measures through reducing oil production in Alberta by 9% (roughly 325kbpd), in a bid to ease the supply glut of Canadian crude. This in turn, has seen Western Canadian Select oil jump 10%. Alongside this, oil prices have received a boost as Russia and Saudi Arabia stated that they will extend cooperation, consequently increasing expectations that a cut will be announced at this weeks OPEC. Oil prices will likely continue to dictate price action in the CAD in the upcoming week.
Trade Truce Boosts Risk Appetite
Following the G20 summit, both President Trump and Xi agreed to hold on new tariffs, which entails the US not raising the tariff rate on goods from January 1st to 25% from 10%, while China agreed to purchase more agricultural products. In addition, China had also agreed to reduce and remove tariffs below the current rate of 40%. As such, this has buoyed risk appetite, while the USD has taken a slight dip. On the Canadian trade front, US Trade Representative Lighthizer stated that talks will continue this in regard to aluminium and steel tariffs, whereby positive development will likely provide further support for the Loonie.
USDCAD PRICE CHART: Daily Time Frame (Jan-Dec 2018)
--- Written by Justin McQueen, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.