Canadian Dollar Flat After Mnuchin Boosts USD

 | Apr 21, 2017 01:18AM ET

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.