Loonie Falls with Crude Oil Prices, Regains Strength vs. Greenback

The Canadian dollar weakened on the signs of increasing supplies of crude oil, the main export of Canada, yet the currency managed to rebound versus its US counterpart as the stocks rallied.

The Canadian dollar slipped after Ali al-Naimi, the Saudi Arabian Minister of Petroleum and Mineral Resources, said that the Organization of the Petroleum Exporting Countries will be able to meet the growing demand and signaled that Saudi Arabia isn’t interested in increasing oil prices. The possibility of the increasing oil supplies from OPEC and the end of the prices’ rally may hurt export revenue of Canada. March delivery for crude oil slipped 1.6 percent to $87.70 per barrel on NYMEX.

Despite the negative influence of the commodity market, the Canadian currency has found support from the rally of stocks. The consumer prices rose 0.1 percent in December and 2.5 percent on the annual basis, according to the analysts’ estimates before today’s report. The experts forecast that the inflation may reach the central bank’s target of 2 percent by the end of the next year.

USD/CAD traded near 0.9918 as of 05:45 GMT today after it rose yesterday from 0.9935 to 0.9981 and later returned to the opening level. EUR/CAD traded at 1.3543 after the rise from 1.3517 to 1.3547 on the yesterday’s trading session.

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