CAD lags as Venezuelan Oil risks weigh – ING
|The Canadian Dollar (CAD) is the weakest G10 currency as markets factor in potential Venezuelan Oil supply and uncertainty around USMCA renegotiations, ING's FX analyst Francesco Pesole notes.
Canadian Dollar vulnerable on USMCA and BoC risks
"The Canadian dollar is the worst-performing currency in the G10 since the weekend. Markets are clearly weighing the risks of increased supply of Venezuelan Oil in the future, which would disadvantage Canadian heavy, high-sulphur crude, which had been trading at a premium during Venezuela’s supply glut. The Western Canadian Select-WTI widened slightly on Monday, confirming the commodities market is trading carefully on these geopolitical events."
"However, CAD is in a more vulnerable spot. Our short-term fair value model suggests the pair should be trading above 1.380, and we think markets may still be underestimating the risks of USMCA renegotiation uncertainty’s impact on the economy and the risks that the Bank of Canada may have to cut again in 2026."
"We continue to favour other high-beta currencies like NZD, SEK and NOK over CAD for now, and we see risks to the 1.390 area in USD/CAD."
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.