The Canadian dollar hit its highest point in more than two years on Thursday as the United Kingdom announced it had approved a Covid-19 vaccine and oil prices were buoyed by an apparent deal among members of the Organization of the Petroleum Exporting Countries to extend their current production cuts past January 2021.
The loonie at one point rose as high as 77.61 cents U.S., its highest level since October 2018.
The main catalyst for the Canadian dollar’s rise were media reports that members of OPEC and Russia are near a deal to extend production cuts of more than seven million barrels a day well into the New Year.
Some in the oil cartel have pushed for a three-month extension to May 2021 for the cuts, but given the recent run up in oil prices, the cartel has settled on a compromise of maintaining the cuts into February 2021.
A barrel of West Texas Intermediate crude oil was trading above $45 U.S. on Thursday, a level it has not reached and stayed above since early March when the pandemic crushed demand for energy around the world.
The loonie is riding the wave of higher oil prices, as well as Covid-19 vaccine news, but is also benefiting from a general weakness in the U.S. dollar.
