Oil prices hover at $45 a barrel ahead of crucial OPEC meeting today

All eyes are on a long-anticipated formal OPEC meeting in Vienna today as oil prices hovered near two-week lows around $45 a barrel. Oil ministers will gather today to try to reach a deal to cut production levels as a global supply glut has kept prices low. There are hopes that OPEC will reach an agreement to limit some oil output but the main obstacles to a deal would be Iran and Iraq, which are one of the largest global oil producers. Oil prices have been very volatile this week, slipping nearly 4% on Tuesday after rising almost 2% on Monday. WTI oil traded down to a low of $42.18 a barrel in Asia today. One currency that has been most affected by weak oil prices recently has been the Canadian dollar which has weakened the most in eight months as Canada is a major oil producer. In the past two weeks the USDCAD pair has been trading above the key $1.3400 level. The US dollar rebounded slightly in Asian trading to pare some losses made against the yen yesterday. The greenback was not able to sustain gains despite upwardly revised US GDP data for the third quarter. The second estimate was upgraded from 2.9% to 3.2%. Other US data showed November consumer confidence come in stronger than expected. After surging to 113.33 yen yesterday, the USDJPY pair fell below the key 112.00 level but steadied in Asia to edge up to a session high of 112.95 yen today. The greenback is headed for the biggest one-month advance versus the yen since 2009 as expectations of a Fed rate hike in December helped support the US currency. Sterling trimmed some gains made after a strong rally against the dollar yesterday. The pound rose to a high of $1.2524 from $1.2387 after it was spurred by upbeat UK mortgage approvals and consumer credit. Cable traded down to $1.2468 in the Asian session today. The Australian dollar dropped against the greenback after data showed Australian building approvals fell by 12.6% month-on-month in October to 16,279 approvals, following a 9.3% drop in September. AUDUSD slid to a session low of $0.7461. The New Zealand dollar outperformed today to climb to its highest level against the US dollar in almost three weeks at $0.7158. The economic calendar today includes Eurozone flash inflation data and the Bank of England financial stability report as well as UK bank stress tests. Data out of the US will focus on the November ADP employment report, November Chicago purchasing managers’ index (PMI) and October pending home sales. Meanwhile, a speech by ECB President Mario Draghi later today may attract some attention. The highlight of the day will be the OPEC meeting.

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