Strong crude oil prices reined in the slide in the Canadian dollar last week despite disappointing economic indicators, with WTI crude oil hitting $59 on Friday for the first time in two years. This trend could continue if the meeting of the Organization of the Petroleum Exporting Countries (OPEC) this week in Vienna proves conclusive. The output cuts agreed to at this time last year by OPEC and Russia have finally paid off, and OPEC is likely to confirm that they will be extended.
Canadian and U.S. (second reading) Gross Domestic Product (GDP) data for the third quarter will be released this week. Monthly data indicate that the Canadian economy experienced sound growth, albeit more moderate than in the first half of the year. Growth of 1.5% is expected compared to the previous quarter’s 4.5%.
This week will also be important in terms of the Republican Party’s tax reform plan south of the border, which the Senate will be voting on.
The U.S. dollar is starting off the week down as we await developments on these important fronts.
Mark Donohue
Range of the day: 1.2625 – 1.2735