CAD holds range on the day – Scotiabank

FXStreet Insights Team FXStreet

So, the 25% tariff regime might have had a very short shelf life after all and we might be looking at low double digit border tariffs now, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Market awaits developments

"That’s still not great, only relatively less painful. But it might be about where markets have priced broader tariff risks into the Canadian Dollar (CAD) at this point which means downward pressure on the CAD may ease as we assess the outlook for additional tariffs moving forward. The CAD has gained little in overnight trade after rallying into the close yesterday and may struggle to push much higher while tariff uncertainty persists."

"A rebound in risk appetite and narrower US/ Canada spreads are modest tailwinds for the CAD but rightsizing spot to its estimated fair value equilibrium (currently 1.4224) may have to wait for clarity on what the ultimate tariff regime facing Canada looks like. Note markets have pared expectations for next week’s BoC policy decision somewhat, pricing in 18-19bps of cuts, from all but fully pricing in a 1/4 -point cut yesterday."

"Spot has swung sharply between 1.4370 and 1.4545 since the start of the week, defining near-term ranges. Those ranges are holding this morning, with the market reluctant to lean too hard on USD/CAD. A break under 1.4350/70 should drive spot lower, potentially towards 1.4200/50 on a range extension trade, however."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD trims intraday gains, stays flat around 1.1630

EUR/USD struggles to find direction and trades in a narrow channel on Monday. Investors refrain from taking large positions ahead of this week's critical Fed policy meeting, allowing the pair to stay in a consolidation phase following two consecutive weeks of bullish action. US Dollar gains ground as risk aversion kicks in.

GBP/USD edges lower toward 1.3300 as markets turn cautious

GBP/USD corrects lower toward 1.3300 on Monday after posting gains in the previous week. The markets adopt a cautious stance ahead of the highly-anticipated Fed meeting, making it difficult for the pair to gather bullish momentum.

Gold remains seases below $4,200 as markets gear up for Fed

Gold turned south after Wall Street's opening, trading south of $4,200. The US Dollar finds additional legs on a souring mood on Monday as market participants prepare for the upcoming Fed meeting, which will provide key insights into the short-term policy outlook.

Bitcoin and Ethereum aim for breakouts as Ripple holds at $2

Bitcoin, Ethereum, and Ripple record a minor recovery on Monday, starting the week on a positive note. The retail demand for major cryptocurrencies remains strong despite outflows from Bitcoin and Ethereum Exchange Traded Funds.

The Silver disconnection is real

Silver just hit a new all-time high. Neither did gold, nor mining stocks. They all reversed on an intraday basis, but silver’s move to new highs makes it still bullish overall, while the almost complete reversals in gold and miners make the latter technically bearish.