Oil prices rallied this afternoon as hopes for an oil production freeze heighten, following a 2-year battle to get OPEC’s 14 members to agree a deal. Saudi Arabia’s energy Minister, Khalid al-Falih, stated that the cartel, which controls a third of the World’s oil production, are in a position to compromise over a production freeze.
Equally Saudi and Iraq are close to a settlement, which looks to cut daily production to 32.5m b/d amongst all 14 OPEC members.
The Canadian Dollar is set for further gains if the agreement follows through, with oil now sitting above $50 a barrel.
But some remain sceptical to such a deal, given OPEC’s inability to finalise a deal for 2 years. Markets will wait and see as to whether oil prices continue their upbeat trend, and whether the likes of Iran and Saudi Arabia can stick to an agreement.
Pound to Canadian Dollar exchange rates hit by poor UK consumer confidence and strong Canadian GDP figures
Pound to Canadian Dollar exchange rates suffered a further hit this morning, pushing GBP/CAD 0.5% lower following a huge fall in UK consumer confidence. The GFK consumer confidence survey posted a huge decline witnessed in similar fashion to July’s release following the UK’s Referendum.
Strong Canadian GDP figures also helped bolster CAD, which could be set to continue if oil prices continue to rally off the back of today’s OPEC agreement.
Oil is Canada’s biggest export and makes up a large portion of the countries’ GDP.
Pound to Canadian rates will remain volatile to oil price fluctuations but much of the market movements are driven by Brexit uncertainty and economic concerns in the UK. Next week’s Supreme Court hearing could result in the Tory Government having full control of Article 50, which Theresa May has promised will be invoked in March 2017. The Canadian Dollar could strengthen significantly against the Pound if this was to occur.