Commodity currencies fall

Commodity currencies were weakened on Friday as many investors were quite disappointed regarding production cuts agreed by OPEC and other oil exporters.

The Canadian dollar closed at C$1.3484 per $1 after reaching five-week high of C$1.3388 on Thursday. The Australian dollar lost 0.1 percent closing at $0.7447 added to its 0.7 percent losses on Thursday.

The euro shed 0.1 percent closing at $1.1199 after hitting 6 month high of $1.1268 in the course of the week.

Weak macro-economic data published in Britain made the pound lose 0.3% closing at $1.2908. The British currency also lost 0.3% on Thursday.

OPEC-led production cut extended till 2018

OPEC and other oil exporting countries agreed to lengthen a pledge to cut around 1.8M barrels per day till the end of the of the first quarter of 2018 (the initial contract will end this June). The meeting took place in Vienna on Thursday.

Despite the agreement, oil prices ended in the red zone. Brent crude went lower by 37cents. US West Texas Intermediate crude went below $50 closing at $48.46 per barrel after losing 44 cents.

U.S. oil production has already risen by 10% since 2016 to over 9.3 million bpd, close to the production of top producers, such as  Russia and Saudi Arabia.

According to Goldman Sachs, oil prices may suffer next year when the OPEC-led production cuts expire. US oil production is increasing gradually and OPEC and other exporters intend to raise production in the course of 2018 to recover lost market share. The result may be significant price reduction.

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