FX Daily Update
The National Bank of Canada | Dec 12, 2016 08:54AM ET
Oil (WTI) is up by more than 4% on this beautiful wintery morning. On the weekend, Saudi Arabia, Mexico and Russia came to an agreement to reduce output, lowering the daily production of non-OPEC member countries by 558,000 barrels. Russia alone is proposing a reduction of 300,000 barrels by May. Though this is only an agreement in principle for now, Saudi Arabia’s willingness to send the price per barrel up seems undeniable.
For currencies, such an announcement is resulting in the greenback being under pressure against all the major currencies. However, the loonie is only posting very meagre gains for the time being, possibly due to the viewpoint that there is still a lot to do to improve the economic context in Canada. It is possible that markets remain cautious in anticipation of the Federal Reserve meeting on Wednesday where a key rate increase is expected. Obviously, such a context could be highly reactive to any comments that could make a difference in this situation. Just like on the roads, caution is key.
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