Lack of OPEC Deal Sent Pound Sterling vs NOK and CAD Exchange Rate Forecast Higher Yesterday

June 3, 2016 - Written by John Cameron

STORY LINK Lack of OPEC Deal Sent Pound Sterling vs NOK and CAD Exchange Rate Forecast Higher Yesterday

The Pound has lost many of its earlier gains against commodity currencies today, owing to the latest US data sending the USD down and most commodity peers up.

Lack of OPEC Deal Weighs on Crude Oil Prices, CAD and NOK Struggle

The price of a barrel of crude oil has jumped by some 90% since February, when it traded down to as low as $27. However, yesterday’s failure by the Organisation of the Petroleum Exporting Countries (OPEC) to reach an agreement on capping levels of production has caused a near-term downshift in oil prices.

Brent Crude had started the day’s session at above the psychologically significant $50 level, but quickly edged back down into the $40s as news emerged from OPEC representatives’ Vienna meeting that no agreement to curtail production had been reached.

U.A.E. Oil Minister Suhail Al Mazrouei explained the decision, informing members of the press that, ‘from the beginning of the year until now, the market has been correcting itself upward,’ before going on to assert that, ‘the market will fix itself to a price that is fair to the consumers and to the producers.’

In the near-term OPEC’s decision to continue at current output levels has hurt the petro-currencies, with the Norwegian Krone (currency : NOK) and the Canadian Dollar (currency : CAD) both losing support against the Pound Sterling (currency : GBP). However, if Suhail Al Mazrouei is correct and prices recover during the second half of 2016, then both the GBP NOK and GBP CAD exchange rates are forecast to track Southwards once more.

US Non-Farm Payrolls to provoke Market Volatility Today

Looking ahead, the undoubted data highlight for today’s session comes in the form of this afternoon’s US jobs data. Analysts are anticipating another showing of 160,000 from the headline monthly Non-Farm Payrolls job creation number.

Meanwhile, the overall rate of joblessness stateside is expected to fall back below the 5.0% level. Anything less than this, on either count, and the US Dollar (currency : USD) is forecast to head into the weekend market shutdown on a weaker footing; such an outcome could send the Pound Sterling US Dollar exchange rate up towards the 1.5000 GBP USD threshold once more.

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