Lee Hardman, Currency Analyst at MUFG, suggests that global investor risk sentiment has continued to improve in the Asian trading session supported by building expectations of looser monetary policy from the major central banks. Key Quotes “Crude oil related currencies such as the Canadian dollar are deriving support as well from building speculation that producers may agree to cut production to help support prices. The speculation is helping to stabilize the price of crude oil at least temporarily at just over USD30/barrel which in turn is helping to provide a more supportive environment for risk assets in general in the near-term. Building speculation over potential crude oil production cuts was further reinforced by a Bloomberg report overnight stating that Saudi Arabia’s oil minister plans to meet with his Russian counterpart in Doha today to discuss the oil market according to a person familiar with the talks. The meeting will also be attended by fellow OPEC member Venezuela. Saudi Arabia has insisted that it won’t reduce production unless major producers outside of OPEC co-operate. Still market participants remain sceptical both that meaningful production cuts will be agreed while Iran is increasing production, and whether any cuts will prove effective at lifting prices with global growth weakening. The weakening outlook for global demand is increasing the risk that the price of crude oil will remain lower for longer as it will potentially delay rebalancing in the massively oversupplied oil market. The International Energy Agency recently stated that downside risks for the price of crude oil have increased in the near-term as the surplus of oil supply over demand early this year was even greater than they had been forecasting. The recent gains for crude oil related currencies are built on fragile foundations.” For more information, read our latest forex news.