CAD: Markets await US tariff news Tuesday – Scotiabank

The Canadian Dollar (CAD) is little changed over the weekend as investors continue to focus on tariff uncertainty. US Commerce Sec. Lutnick commented Sunday that the president’s thinking on the approach to border tariffs was 'fluid' and noted both Canada and Mexico had made efforts to bolster border controls, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

CAD little changed on the day

"He said there will be tariffs Tuesday but exactly what emerges was up to the president. There is perhaps a hint here that the full force of 25% tariffs might not be unleashed tomorrow, given their negative implications of tariffs for the likes of the US auto, steel and textile sectors plus the inevitable bump in US prices at a time when surveys suggest continued concern in the US about inflation." 

"Beyond tariffs, Canadian GDP data for Q4 reported last Friday support the idea that the economy was picking up momentum at the end of last year. December industry-level GDP was a bit weaker than expected but preliminary data for January suggest a modest pick up again. Were it not for tariff risks, Canadian swaps would likely not be looking at much, if any, additional easing now." 

"Spot tested—and held—noted resistance at 1.4465/75 late Friday and that zone remains important resistance ahead of major resistance at 1.4795/00 after significant daily and weekly reversals formed here in early February. Support is 1.4350/75 and 1.4250."