CAD trades near estimated fair value on softer USD – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) has firmed up a little in response to the improvement in risk appetite, although it is lagging its commodity cousins’ intraday gains, Scotiabank's Chief FX Strategist Shaun Osborne notes.

CAD is firmer on softer narrower spreads

"Narrower US/ Canada spreads are providing the CAD with some additional tailwinds (2Y swap spreads are the narrowest in four months) but the CAD needs a fair bit more spread compression to sustain more meaningful gains, I believe. Spot is trading right on our fair value estimate (1.4196) today. The BoC’s Q1 Business Outlook Survey reflected weaker business sentiment and widespread uncertainty related to tariffs which has spilled over into hiring and investment decision-making. No surprise."

"As might be expected, however, tariffs are also lifting price expectations. Expectations for input prices turned higher for the first time in two years, according to the survey. Markets are clearly leaning towards more easing coming from the Bank in the coming months but policymakers are likely to want more certainty around the outlook than they have right now before deciding whether to cut. I think a move next week is unlikely."

"Spot remains range-bound in a broad sense. But short-term, price signals do suggest the USD peaked yesterday near 1.43 via a daily “doji” candle signals and a bearish outside range pattern on the 6-hour chart. Shortterm resistance is 1.4260/70, with firm resistance at 1.4400/20. Support is 1.4150 and 1.4025/30."

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.

British Pound eases to 1.3450 area following downwardly revised Manufacturing PMI data

The British Pound is trimming previous gains against the US Dollar on Monday, returning to the mid-range of the 1.3400s down from fresh seven-week highs, above 1.3500 earlier on the day. Weaker-than-expected UK manufacturing data added pressure on the Pound, which rallied at the Asian session opening, amid news of a halt to the hostilities in Iran.

EUR/USD remains under pressure; looks at 1.1500 on firm US ISM

EUR/USD now accelerates its downtrend and trades in the low 1.1500s on the back of the marginal improvement in the US Dollar, all in the wake of solid US ISM Manufacturing data on Wednesday. The Greenback, in the meantime, remains far from a sustainable rebound in the current context of cooling geopolitical tensions.

Gold remains supported near $4,000

Gold adds to Friday’s pullback, although it remains well underpinned by the key $4,000 threshold per troy ounce on Monday. The US Dollar’s inconclusive price action seems enough to cap the yellow metal’s potential upside, although renewed hopes for a US-Iran peace deal and fading expectations of a Fed rate hike could limit the Greenback’s recovery.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

The Bitcoin futures yield collapse: Once over 20%, now less than Treasury notes

Once a goldmine for carry traders, Bitcoin futures have flipped, consistently underperforming plain‑vanilla U.S. Treasuries every month since February. Carry trades consistently yielded 20% or more across regulated and unregulated crypto exchanges during the 2021 bull market. The strategy involved shorting Bitcoin futures while simultaneously buying a spot exchange-traded fund (ETF).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.