The Canadian Dollar is trading against the Saudi Riyal at 2.93% this morning, down -0.43% with a YTD change of -0.39%. The pair’s open rate was 2.95, up from the previous close of 2.94. CAD/SAR is expected to have a day range between 2.94 and 2.96, the 52-week range should fluctuate between 2.55 and 2.97.
CAD was gaining momentum at the end of December, rising from the 2.91 support level to 2.95 during the first week of January then again to the 2.96 level at the beginning of last week. CAD lost momentum against SAR by week's end, as the exchange rate dipped below 2.94.
After a successful run within oil markets, CAD has been experiencing bullish trading tendencies based on doubts over the Keystone XL pipeline. After talks of being canceled, the pipeline may cost the loonie to lose the recent gains that were seen at the beginning of the month.
“Market tightness” has been the new term used to explain global crude markets, but even with scarce supply, bears will be able to take some time to premeditate their next moves. According to Oil Price Saudi Arabia “has sent a strong signal to the market with its February 2021 official selling prices, surpassing market expectations. All Asia-bound grades were hiked by 20-70 cents per barrel with steeper increases in the light range.”
Saudi Arabia is also committed to cutting production by 1mbpd in the coming months which may “lead some refiners to rethink their regional purchases.” With oil driving CAD/SAR, the currency pair will be closely watched as CAD is anticipated to suffer based on recent decisions about the Keystone XL pipeline. If SAR barrel prices are able to sustain themselves throughout the week, CAD/SAR could be a worthwhile investment for bulls moving into February.
By Surina Nath