CAD’s week-long slide extends – Scotiabank
|The Canadian Dollar (CAD) continues the steady slide seen over the past week but has held up relatively well so far today in the face of President Trump’s latest tariff moves, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
US sticks 35% tariff on some exports
"PM Carney said he was disappointed but Canada will continue to negotiate. Canada’s USMCA exemption remains intact, as do previously announced sectoral tariffs. The BoC estimated recently that the overall effective tariff rate on Canadian exports to the US was around 5%. That will rise slightly on the back of the latest developments."
"USMCA gives Canada some protection from broader tariff headwinds, at least for now, and will allow the BoC to remain sidelined for the foreseeable future as it assesses the impact of the US’ attempts to reorder global trade. With the USD up more than 2% from last week’s low and the CAD straying from our FV estimate (1.3752), spot may be able to steady in the short run."
"But short-term gains are looking stretched and the USD rally has paused through European trade which may allow the CAD to catch its breath. Still, the USD’s gains through 1.3750/00 where I had expected better resistance implies more upside risk for the USD in the next few weeks. The USD is trading above the 23.6% retracement resistance (1.3836) from the 1.48/1.35 decline and holding above there through the close of the week will point to further gains towards 1.39/1.40. Support is 1.3810/20."
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.