Canada is a haven for crude oil production. By January 2017, the country was producing 4107 BB L/D/1K of crude oil. This is the highest figure ever for Canada, and prospects remain promising for increased production and higher oil prices. In terms of global competitiveness, Canada is at position #3 for crude oil production. Leading from the front is Russia with a January 2017 figure of 10,733, the United States with 9,031 (February 2017), and then Canada. Behind Canada are China, Brazil, Mexico, the United Kingdom, Indonesia, India, and Australia. The Canadian economy is showing strong signs of improvement, after a decade of weak economic growth.

 

Unemployment Rate Dropping and CAD Rising

The Canadian unemployment rate in April 2017 dropped to 6.5%, from a figure of 6.7% in March, and a figure of 6.6% in February. The forecast rate for April was 6.7%, but expectations were bested by the actual figure. This marks the lowest unemployment rate in Maple country since the 2008 global financial crisis. Viewed holistically, there are clear signs that the Canadian economy is on the mend. If we turn our attention to the loonie, some interesting trends emerge. The CAD/USD currency pair is currently up 0.5390% at 0.7331. While this is certainly not a high point for the currency, it represents a strongly up-trending Canadian dollar.

 

Consider that the CAD started the year at 0.7444 against the greenback, and has only slipped ultimately 0.0109 since then. Canadians are wasting no time diversifying their portfolios to reflect the current economic climate. While the USD appears to be firming, the geopolitical uncertainty that is evident in North Korea and Europe is driving traders toward safe-haven assets. This has resulted in many Canadians investing in a Gold IRA . The gold price is certainly bearish, making the case for investors to plow into the precious metal before it reverses and heads towards the critical $1300 per ounce level.

NAFTA Concerns Weigh on the CAD

There were some concerns that President Donald J. Trump would cancel NAFTA, or at least make the North American Free Trade Agreement more favorable to the US. This put downward pressure on the CAD. The big question on everyone’s mind is how investments should be made in Canada with NAFTA fighting for its survival. When it comes to the stability of the CAD/USD currency pair, remember that this is one of the most stable relationships in the world. These two North American countries are built on rock solid foundations with a thriving democracy and robust political discourse. The economies are equally strong, and among the best in the world. Canada ranks highly in terms of its global crude oil production, accounting for some 4.9% of all oil that is produced. Canada’s GDP is heavily influenced by its crude oil exports, particularly to its southern neighbor, the US.

Bank of Canada Lends Support to Economy

With respect to investment opportunities in Canada, a leading Saxon Trade analyst, Montgomery Giles believes energy companies are going to be boosted in 2017. The industry may be subject to contractions in the oil price, but greater efficiency and better management in Canada is resulting in bullish prospects for the domestic industry. Things like bitumen solvents and automation are driving up profits, despite weakness in oil prices. This naturally lends itself to an improved CAD/USD currency pair. The Canadian dollar – the loonie – is directly correlated with the country’s crude oil strength or weakness. The Bank of Canada has given the economy its seal of approval by promoting things like automation and greater productivity for the Canadian economy. The interest rate remains low at 0.5%, making it easy for Canadian businesses to finance operations across the board. These are the types of monetary drivers that propel economic growth and prevent deflation from taking root.

 

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