CAD/USD exchange rate bounced back strongly in the last couple of sessions amid healing oil prices. The CAD/USD pair moved higher above 1.28, as globes two largest producers have shown their strong intention for crude oil price stabilization.
In a G20 summit, Russia’ and Saudi’s oil minister conveyed a compelling message for crude oil prices. Both countries have formed a joint monitoring group to look at the market activities. Russia seems in a rush to stabilize prices, as the revenue from oil covers nearly half of overall revenues.
Oil prices are very important to the CAD to USD exchange rate, as the country produces almost 4.2 million barrels a day.
Russian minister also advised OPEC producer to make a consensus on output freeze in the upcoming meeting in Algeria.
Crude oil prices rebounded above two percent following positive comments. Canadian dollar to USD exchange rate also gained momentum with the growth in oil prices.
On the other hand, a weakness in the US dollar rate has also been supporting CAD to US dollar rate. Lower than expected growth in nonfarm payrolls have impacted the USD exchange rate against the Canadian dollar exchange rate.
Lower growth in the nonfarm payrolls to 151 thousand, compared with analysts’ consensus of 180 thousand raised few question marks on the North American economy. However, Canadian GDP growth rebounded strong, with a growth of 0.6% in the month of June, beating analysts forecast of 0.4%.
Crude oil prices are unlikely to fall in the coming days amid hopes over the upcoming OPEC meeting in Algeria, which could provide further strength to the CAD to USD exchange rate. Therefore, betting on Canadian currency exchange rate against the US dollar is a good strategy.