Crude Surge Lifts Exporter Currencies as OPEC Said to Reach Dealby
Currencies from crude exporting nations rallied Wednesday, riding a surge in oil prices higher after OPEC agreed to cut production during discussions in Algiers.
The Canadian dollar, Russian ruble and Norwegian krone paced gains as the Brazilian real and Mexican peso also advanced. The loonie jumped 0.8 percent to C$1.3097 per dollar at 4:19 p.m. in New York, its biggest advance in more than three weeks. Crude surged 4.5 percent to $46.70 a barrel in New York after rising as much as 6.2 percent earlier in the day.
Crude jumped on reports that the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, reached an agreement to limit production for the first time in eight years. The commodity, Canada’s second-largest export, has been the key driver for the country’s currency in recent months, with a rout in prices earlier this year sending the loonie to a 13-year low.
“The extent of the move in the Canadian dollar in the future will depend on the magnitude of a production freeze,” said Mazen Issa, a senior foreign-exchange strategist at Toronto-Dominion Bank in New York. “If it is small, which seems to be the case, then I think the scope for the Canadian dollar to strengthen will have limited legs.”