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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

Canadian Dollar Strengthens on Positive Retail Sales, Higher Oil Prices

Published March 21, 2017
  • Oil prices moved higher this morning; markets are speculating that OPEC may extend its production cut beyond the original June 2017 deadline if crude inventories fail to drop to a targeted level
  • Sources within the group said that OPEC oil producers are increasingly in favour of extending the pact, stating “an extension is needed to balance the market”; OPEC officials also opined that the group would need Russia and other non-members to participate as well
  • In the first reduction in eight years, OPEC members pledged to cut output by about 1.2 million barrels per day from January 1, 2017 for six months; Russia and a few other non-members agreed to cut production by half as much
  • The goal of OPEC’s production cut was to drop crude oil stockpiles in the industrialized world to the average number of stockpiles in the past five years; data from January shows that current inventories of crude and refined products stand at 278 million barrels above this level
  • The Canadian dollar is experiencing gains against the US dollar this morning as oil moves higher; the Loonie is also benefiting from Canadian retail/core retail sales which both showed strong improvements month on month
  • The US dollar is also suffering after Chicago Fed President Charles Evans reiterated the Federal Reserve’s dovish stance on two rate hikes this year in a speech yesterday, disappointing hopes for further tightening
  • The euro soared to six-week highs this morning; opinion polls showed that centrist Emmanuel Macron was the winner against EU-skeptic Marine Le Pen in yesterday’s French Presidential Debate