The price of oil has fallen in recent weeks with OPEC struggling to get oil producing nations to agree on a production freeze. Will they be able to push ahead with an agreement in tomorrows meeting with the 14 members?
Despite Boris Johnsons comments at the end of last week that he felt article 50 will be triggered at the beginning of 2017, the Pound managed to make gains against the CAD on Friday afternoon. This bucked the trend for Sterling, which fell against most of its major counterparts, mainly due to weaknesses highlighted in the Canadian economy.
This week has started in similar vein for the Loonie, as uncertainty over oil prices and a meeting between the 14 members of OPEC (Organisation of Petroleum Exporting Countries) tomorrow looms. As a net exporter of oil, the Canadian economy is heavily reliant on the price of oil and due to the huge drop in oil prices over the past year the CAD and the Canadian economy in general have suffered. The drop in prices has been as a result of a drop in demand for oil since OPEC have failed to reach an agreement to curb production.
This breakdown in communications has seen the price of Crude oil drop from around $100 a barrel in 2014 to just shy of $45 today. Understandably this has seen economic growth in Canada drop and therefore resulted in a lack of confidence in the Loonie. Those with a CAD requirement should keep an eye out for developments from the meeting tomorrow as any agreements on oversupply could help the CAD to regain some of its lost ground over the past week.
Friday has the potential to weaken the CAD further still however, with GDP figures for July set to show a decline and fall in line with last weeks negative data sets. This is again due to the drop in oil prices, with Crude oil slumping to almost $40 per barrel in the period. If you are buying Canadian Dollars in the near-term keep in touch with your broker here who can help you take advantage of any spikes in your favour over the coming days.
Tomorrows meeting could have implications on the price of oil and thus, CAD. Call our team today if you have a Canadian Dollar requirement and need help in making an informed decision on a currency transfer.
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