FX Daily Update
The National Bank of Canada | Dec 01, 2016 11:14PM ET
Highly conditional OPEC agreement
The suspense is over: after weeks of negotiations, members of the Organization of Petroleum Exporting Countries (OPEC) have reached an agreement. The price of WTI oil reacted sharply, spiking upward 9.31% yesterday and bringing the loonie along with it.
The OPEC agreement includes output cuts in the order of 1.2 million barrels per day for the first six months of 2017. It is important to note that the agreement remains conditional on countries that are not members of the cartel also trimming their production by some 600,000 barrels per day.
Canada posted positive GDP numbers yesterday, with an increase of 3.5% in the third quarter. A number of U.S. economic indicators also outstripped expectations, including the Chicago-area manufacturing index, which hit its highest level since 2015.
This morning, we’ll be keeping an eye on the ISM Manufacturing Index in the United States, which is likely to have continued expanding in November. The USD/CAD pair should remain relatively stable today as we await tomorrow’s job numbers.
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