The Canadian dollar exchange rate surged massively in the latest trading session following the news of deal among OPEC producers to cap their output. OPEC producers agreed to cut their output from 33.5 million barrels a day to 32.5 million barrels a day.
The surprise deal among OPEC producers provided a huge support to crude oil prices and exchange rate of major oil producing countries.
Canadian loonie exchange surge to nearly four week high against the U.S. dollar exchange rate on Wednesday, as oil prices surged nearly 6% following the deal.
The OPEC news gave the Canadian dollar currency rate a support after the Lonnie currency conversion rate was under pressure due to soft household data and timid remarks from Bank of Canada Governor .
The Canadian dollar currency rate finished at C$1.3109 to the U.S. dollar currency rate compared with Tuesday’s settlement of C$1.3203. The loonie to USD exchange rate surged 0.7 percent during Wednesday trading, the largest gain since Sept. 2.
Canadian dollar to USD rate will strengthen further in the coming days, as crude oil prices are poised to trade in the range of 60 a barrel following OPEC deal.
Canada is the globes major producer, with current production level of 4.2 million barrels a day. Canadian economy is highly dependent on crude oil revenues, while the growth in oil prices will stabilize the struggling Canadian economy. Therefore, CAD to USD rate is likely to get a further strength with the stabilization oil prices
On the other hand, the U.S. government reported that U.S. core capital goods orders surged the month in August third time in a row, which is a strong indicator for the business investment outlook. A lift in the U.S. business investment is likely to recover the outlook for Canadian non-energy exports.