Canadian Dollar Extends Slide As Oil Prices Plunge After OPEC Decision

The Canadian dollar continued yesterday’s slide in early European deals on Friday, as oil prices plunged after oil cartel OPEC agreed to leave oil production quotas unchanged at its meeting in Vienna.

Crude for January delivery fell $5.04 to $68.65 per barrel.

The OPEC members, at their meeting on Thursday, decided to maintain the cartel’s collective production ceiling of 30 million barrels a day even as oil prices slumped.

“We are not sending any signal to anyone, we are just trying to have a fair price,” OPEC Secretary General Abdalla Salem El-Badri told reporters.

“I’ve been in this business for a long time. When I was a minister, oil was $15 per barrel. So the current price can be called good,” the Secretary added.

Prices have fallen 30 percent since June due to increased US shale production and faltering demand as growth slows in China, Europe and emerging markets.

The European markets are also trading lower, with concerns that dwindling oil prices could increase the risk of deflation in the euro zone, complicating life for the European Central Bank whose inflation target is just under 2 percent.

The currency fell sharply in yesterday’s New York session, as OPEC decision to leave output target unchanged took oil prices to a 4 year low.

The loonie declined to a 2-week low of 1.1382 against the greenback, down from yesterday’s closing quote of 1.1328. The next possible support for the loonie lies around the 1.15 zone.

Reversing from an early high of 104.27 against the yen, the loonie eased to 103.84. If the loonie extends slide, 102.00 is likely seen as its next support level.

A report released by Japan’s Ministry of Internal Affairs and Communication showed that annual core inflation in Japan slowed in line with expectations. Core annual inflation eased to 2.9 percent in October from 3 percent in September.

The loonie, which closed Thursday’s trading at 1.4124 against the euro, declined to 1.4159. Next key support for the loonie may be found around the 1.425 region.

German retail sales grew at the fastest pace in more than three years in October, as consumer confidence strengthens amid favorable labor market conditions and low inflation.

Retail sales rose a calendar-and-seasonally adjusted 1.9 percent month-over-month, preliminary figures from Destatis showed. Economists had expected 1.5 percent growth.

The loonie came off from its previous high of 0.9634 against the aussie and fell back to 0.9672. On the downside, 0.974 is seen as its next support level.

Looking ahead, Eurozone jobless rate for October and consumer price index for November are due shortly.

Canada’s GDP data for September and industrial product price index for October are set for release at 8:30 am ET.

Published: 2014-11-28 09:22:00 UTC+00

Canadian Dollar Extends Slide As Oil Prices Plunge After OPEC Decision