The Canadian dollar hit a two-year high on Thursday, with the UK announcing it had approved a coronavirus vaccine for emergency use and oil prices extended their current production cuts in January through a clear agreement between OPEC countries.
At one point Looney hit 77.61 cents, the highest level since October 2018.
A catalyst for Looney’s emphasis was that members of the Organization of Petroleum Exporting Countries and Russia had reached an agreement in January to expand production cuts of seven million barrels per day.
Some in the oil cartel had cut back for a three-month extension until May, but due to recent oil price hikes, the cartel has compromised on continuing cuts in February.
“This is roughly what is expected from these talks, so oil prices will continue to trade high,” said Craig Erlam, an analyst with foreign exchange firm OANDA.
West Texas Intermediate Oil traded above $ 45 a barrel on Thursday, but did not reach the beginning of March despite growing pandemic demand for energy worldwide.
Currencies benefit in the hope that the global economy will recover
Looney is driving a wave of high oil prices, but is also benefiting from the general weakness in the US dollar.
Winners of the Australian dollar, euro and Korean also hit a two-year high against the US dollar on Thursday as the flight for U.S. currency security is likely to end.
Britain announces approval of Pfizer’s COVID-19 vaccine for emergency use, Which has raised expectations that other countries will soon follow suit. This raises hopes that the world economy will soon return to normal.
“There is a lot of talk that the UK is preparing for the vaccine next week – faster than many expected and it is having an impact on pretty much everything,” said Michael Curie, TD’s vice president and investment adviser. Wealth.
On the downside, this is bad news for the US dollar, which rose about 13 percent during the epidemic because it was a perceived store of value. If things are really getting better, there is less need to keep cash safe like the US dollar.
Looney can over-lead: Analyst
Shawn Osborne, chief foreign exchange strategist with Bank of Nova Scotia, said Looney has appreciated about 10 cents since its entry in April, and is expected to rise even higher in the medium term.
“The U.S. economy has the potential to work on par with other parts of the world [and] Can weaken Canada, “he said in an interview.
“Strong global economy and high demand for commodities … I expect it to be positive for the Canadian dollar. [but] I think we need to get over the next two or three months to see how far this action can go, “Osborne said.