The Canadian dollar rose against its US counterpart on Tuesday, as prices of oil, one of Canadaâs main exports, remained steady. The Canadian currency got more strength following a report that showed an increase in average Canadian oil rig count.
The loonie, as the Canadian currency is commonly known, found support today as oil prices stabilized after a sharp drop that saw more than 4% of the values of Brent crude and US light crude oil erased on Monday.
The drop was triggered by concerns that the Organization of the Petroleum Exporting Countries and other major producers would not follow through with their promise of reducing oil production to ease the global oversupply.
These doubts were raised even as Saudi Arabia, a member country in OPEC, started reducing its crude production. However, investors are not certain that other major producers will follow Saudi Arabiaâs lead, especially after an announcement by the Iraqi government that it will raise exports from its Basra port in February to the highest level in record.
Nonetheless, the average Canadian rig count rose in December 2016 as oil prices improved on news of the possible production cuts. A report by Baker Hughes showed that the number of operating rigs rose to 209 in the last month, which is 36 rigs more than Novemberâs count and 49 rigs more than December 2015.
USD/CAD traded at 1.3231 as of 18:55 GMT on Tuesday, after touching 1.3193 at 15:20 GMT, the pairâs lowest level since January 6. USD/CAD opened trading today at 1.3212
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