- OPEC have come to agreement with Russia and Saudi Arabia over oil production freeze
- Investors remain skeptical – oil prices fall throughout this afternoon
- CADGBP makes small gains but could rebound by tomorrow
The Canadian Dollar has made small gains against Sterling, one of the few currencies to make advances during today’s trading. The news follows what many expected to be an oil production freeze agreement between Russia and Saudi Arabia, two of the biggest oil producing nations.
Upon news of the agreement at the G20 summit, oil prices rallied 5% but have slowly fallen to pre-discussion levels. Investors remain skeptical regarding production freezes given the Saudi’s previous comments to Reuters two weeks ago, and further skepticism has been added in today’s G20 summit meeting. In an interview with Al Arabiya, Mr. Falih said an output freeze wasn’t needed yet. It is a “favorable option, but not necessary today,”.
This in turn could likely prevent Russia from following through with production freeze discussions, and given OPEC’s previous inability to secure agreements, many investors today have pulled out of oil investment.
CADGBP has rallied half a cent today, despite record breaking economic data out of the UK.
Will the Canadian Dollar continue to make gains against Pound Sterling?
I hold the view that this rally will be short lived, this evening at 11:30pm BRC retail sales release which will likely mirror the recent positive Retail sales out of the UK. A positive reading which I expect, could give further strength to Sterling against the Canadian Dollar.
Further afield, I am predicting CADGBP to fall to 0.55 in the weeks ahead, before recovering upon news of Article 50 and the UK’s official withdrawal from the EU.
If you are selling Canadian Dollars for Sterling, this short window of opportunity today could in fact be your best chance.