The Organisation of Petroleum Exporting Countries (OPEC) could be back to the drawing board in the upcoming weeks as Iraqi Prime Minister Haider Al-Abadi has stated the price for a barrel of oil is still below the level that the Iraqi government need, in order to cut their budget deficit. The Iraqi President has outlined they need to see the price rise to $60 dollars per barrel and at present a barrel is costing $53.4. However it has also been reported that Iraq were one of the countries that missed its oil production cut target in January.
Before OPEC managed to get all of the countries to agree to cut oil production at the end of November, last year’s reports suggested that negotiations were challenging. Consequently if there are rumours in the upcoming weeks that some countries will not be sticking to the guidelines set out, I expect the Canadian dollar to become under pressure as oil is Canadas largest export and therefore the Pound could begin to make gains against the Canadian Dollar.
At 1.30pm yesterday, Canada released their latest Retail sales numbers and the figure shocked the market as the figure fell into negative territory (-0.5%). Retail sales shows all goods sold by retailers and is good indicator to consumer spending.
I would have expected to see a substantial fall in GBP/CAD exchange rates however central levels remained buoyant above 1.64. It’s key to note the Canadian dollar plummeted against the US dollar and Euro off the back of the release which just shows the Pound remains under pressure due to Brexit.
Friday at 1.30 Canada are set to release their latest Consumer Price Index numbers. Consumer Price Index is also known as inflation is a measure of the rate at which the level of prices for goods and services is rising. Inflation has a major impact on the currency as high inflation tends to lead to interest rate hikes where as low inflation could lead to an interest rate cut.
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