CAD holds neutral range vs USD – Scotiabank
|The Canadian Dollar (CAD) is dead flat on the session, with neither the generally softer USD tone nor the bid for its commodity cousins helping lift sentiment (AUD/CAD trading near its highest since late 2024), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
CAD slips on crosses vs USD
"News of the Anglo American/Teck merger in an (mainly) all-share deal is unlikely to have a significant impact on the CAD at this point. Shifting BoC policy rate sentiment is unhelpful for the CAD on the face of it but, with markets moving to price in potentially more Fed easing in the coming months, the real damage is being done on the crosses, leaving the CAD the main G10 underperformer over the past month."
"US/Canada 2Y swap spreads are largely stable and holding close to recent lows. Spot remains significantly overvalued relative to our equilibrium (fair value) estimate of 1.3608. Monday’s trading range held within the wide trading range seen Friday and today’s trading range is holding within yesterday’s band. Markets have little motivation to push the CAD in either direction at this point, it would seem."
"The lack of upside follow through in spot after Friday’s sharp USD rebound from the intraday low does suggest some underlying weakness in price action amid generally mixed signals on the charts for USD/CAD. From here, more significant movement/ momentum may depend on the USD either pushing well above 1.3850/55 or below 1.3730/40."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.