The Canadian dollar will end up near where it started the trading session. The USD/CAD is trading at 1.3476 as the pair was caught in a tight trading range were the US dollar weakness started dissipating as the session wore on. The price of oil continued on a downward trend, but there as a ray of hope for higher prices as Organization of the Petroleum Exporting Countries (OPEC) members Saudi Arabia and Kuwait signalled that an extension to the production cut agreement is likely ahead of a general meeting of the organization this weekend. There are rumours that even non-OPEC members who are part of the deal like Russia are on board with extending the original six month term.
Several think tanks and economic agencies have warned about Canadian real estate overheating and following the lead from Vancouver, Ontario announced a 15 percent tax on property purchases by foreign buyers who don’t intend to reside in Canada. The tax is effectively immediately and aimed at curbing prices in Toronto and surrounding areas where properties have jumped 33 percent year over year. The move has been triggered by backlash from residents who have seen housing prices sky rocket ahead of the June provincial elections. The same tax applied in Vancouver is seen as resulting in a 9 percent drop when compared to last year.
US President Donald Trump took aim at the Canadian dairy industry as part of another attack on NAFTA. Canadian Prime Minister Justin Trudeau responded to those comments by pointing out that the US has a dairy surplus with Canada and that regarding agriculture every country protects, for good reason. The USD is still reeling from comments made by Trump who said the greenback was too strong prompting a sell off of the currency. Geopolitical risk is also on the rise as US rhetoric against North Korea has escalated and the French presidential elections have markets on edge.
The USD/CAD lost 0.032 percent in the last 24 hours. The pair is trading at 1.3476 in a tight range on Thursday. The price of oil has been volatile as OPEC comments and US production have kept the price of a barrel of crude around $50. The USD has regained some traction after the comments from US Secretary of Treasury Mnuchin in Washington, but not enough to fully offset earlier losses triggered by Trump’s comments on the strength of the US dollar. The loonie is flat as there will be further quotes from Washington as the IMF/World Bank summit continues.
Oil fell 0.548 percent on Thursday. The price of West Texas is trading at $50.26 in a session where crude almost broke through the $51 price level but the battle between higher US production and the Organization of the Petroleum Exporting Countries (OPEC) production cuts continues. Saudi Arabia and Kuwait made comments on the possible extension of the deal with producers such as Russia theoretically on board. The rise in gasoline inventories on Wednesday, specially ahead of the US driving season, has put the black stuff on the back foot as there still seems to be more supply than demand despite the cuts from OPEC and non-OPEC producers.
Market events to watch this week:
Thursday, April 20
8:30am USD Philly Fed Manufacturing Index
8:30am USD Unemployment Claims
11:30am GBP BOE Gov Carney Speaks
12:30pm GBP BOE Gov Carney Speaks
1:15pm USD Treasury Sec Mnuchin Speaks
Friday, April 21
4:30am GBP Retail Sales m/m
8:30am CAD CPI m/m
Saturday, April 22
All Day OPEC Meeting
Sunday, April 23
All Day French Elections
*All times EDT
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar
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