|

CAD soft but performing relatively well vs. G10 – Scotiabank

The Canadian Dollar (CAD) is soft, down 0.2% against the US Dollar (USD) and outperforming all of the G10 currencies as we head into Monday’s NA session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Focus on BoC Wednesday

"The highlight for this week will be the dual Fed/BoC decision day on Wednesday. For the BoC, markets are looking for a widely expected hold at 2.75%. The BoC has maintained a marginally dovish bias, owing to ongoing concerns related to trade and global growth."

"These concerns have been balanced against the persistence of underlying inflation and signs of broader resilience in the domestic economy with notable strength in Canada’s June employment report. This week’s meeting also includes a Monetary Policy Report and forecast update. The lack of any progress on US/Canada trade talks should allow the BoC to maintain a cautiously dovish bias."

"USD/CAD has traded in a flat consolidation range since early June, with support observed below 1.3600 and resistance seen above 1.3750. The RSI is at 50, reflecting a clear lack of momentum and confirming the neutral trend. We note that USD/CAD’s latest gains are delivering a break above the 50 day MA (1.3697) and risking an extension higher. For now, we look to near-term support below 1.3680 and resistance above 1.3780."

Author

FXStreet Insights Team

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.

More from FXStreet Insights Team
Share:

Editor's Picks

AUD/USD bounces off multi-month low; bulls seem hesitant above mid-0.6800s

AUD/USD edges higher during the Asian session on Wednesday, recovering some of the previous day’s losses to its lowest level since March as the US Dollar stalls the hot US CPI-inspired rally amid hopes of a US-Iran peace deal. Meanwhile, hawkish comments from FOMC members have raised odds for a 50 bps rate hike in December, which favors USD bulls and should cap the Aussie amid expectations of a cautious, on-hold RBA stance.

USD/JPY remains capped below 159.00 amid looming intervention risks

USD/JPY struggles to build on the previous day’s strong gains to a near one-month top as intervention risk supports the Japanese Yen while hopes of a US-Iran peace deal cap the safe-haven US Dollar. Meanwhile, traders have started pricing in the probability of a 50 bps Fed rate hike in December in reaction to Tuesday’s hot US CPI report and hawkish comments from FOMC members. This favors USD bulls and should limit the downside for the currency pair.

Gold seems vulnerable below $4,050 as hawkish Fed bets favor USD bulls

Gold steadies following the overnight decline, trading near $4,035-$4,040 during the Asian session on Wednesday as US-Iran peace deal hopes cap the post-US CPI US Dollar rally. Meanwhile, the possibility of a jumbo 50 bps Fed rate hike in December could limit the downside for the USD and cap the non-yielding bullion, warranting caution for bullish traders.

Bitcoin, crypto market fall as hot US inflation triggers $700 million in liquidations

Bitcoin declines toward $73,000 on Tuesday following October's hotter-than-expected US Consumer Price Index report, which triggered renewed concerns about the Federal Reserve's interest rate outlook.

What the US CPI headline doesn’t tell you about inflation
Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.
Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds
Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.