2020.12.0407:03:00UTC+00Canadian Dollar Advances As OPEC Agrees To Increase Output

The Canadian dollar gained ground against its major counterparts in the Asian session on Friday, as oil prices rose after OPEC and its allies agreed to raise the crude oil output by 500,000 barrels per day from next month.

OPEC and its partners, known collectively as OPEC+, agreed to ease deep oil output cuts by 500,000 barrels per day to 7.2 mb/d from the present levels of 7.7 mb/d.

"In light of the current oil market fundamentals and the outlook for 2021, the Meeting agreed to reconfirm the existing commitment under the DoC (Declaration of Cooperation) decision from 12 April 2020, then amended in June and September 2020, to gradually return 2 mb/d, given consideration to market conditions," the OPEC said in a statement.

The group decided to meet every month to assess market conditions and consider further production adjustments for the following month, with further monthly adjustments being no more than 0.5 mb/d.

Asian stocks were mixed as a bipartisan, $908 billion coronavirus aid plan gained momentum in the U.S. Congress and negotiations over a Brexit trade deal continued, despite differences over fisheries, state aid for companies and rules to resolve disputes.

Employment and trade data from the U.S. and Canada are due out later in the day.

The loonie spiked up to more than a 2-year peak of 1.2848 versus the greenback and a 2-day high of 0.9545 against the aussie, after falling to 1.2874 and 0.9575, respectively earlier in the session. The loonie is seen finding resistance around 1.25 versus the greenback and 0.92 against the aussie.

The loonie edged up to 80.88 against the yen and 1.5608 against the euro, off its early lows of 80.63 and 1.5635, respectively. On the upside, 82.00 and 1.51 are possibly seen as its next resistance levels against the yen and the euro, respectively.

Looking ahead, U.K. construction PMI for November is due out in the European session.

U.S. and Canadian trade data for October, U.S. and Canadian jobs data for November and U.S. factory orders for October are set for release in the New York session.