CAD underperforms on steel tariff threat – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) is softer in response to the latest tariff threat from the US, Scotiabank's Chief FX Strategist Shaun Osborne notes.

CAD holds consolidation range

"But the CAD’s loss is relatively minor and spot is holding within yesterday’s range and is still trading a little below estimated fair value (unchanged this morning at 1.4387). Tariff threats will keep markets guessing about the outlook for BoC policy."

"March pricing is a little better than 50/50 for a cut at this point—policymakers may not have enough information to make the call at that point—but April swaps are pricing in 31bps of easing—up a couple of ticks from yesterday. Wide/wider short-term spreads will remain a major drag on the CAD’s broader outlook."

"Spot is holding within a fairly tight trading range that developed after last week’s huge market swings. Support is 1.4260/70 while the ceiling of the trading range sits at 1.4370/80 (40-day MA sits at 1.4380 this morning). Broader trading patterns continue to lean a little more constructively for the CAD after the huge reversal from Monday’s peak. That may lead to the market to at least try and test support in the upper 1.42s if volatility eases in the next week or so."

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.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Crypto Today: Bitcoin and Ethereum edge lower, XRP extends recovery as macro headwinds weigh

The broader cryptocurrency market is consolidating on Friday, with Bitcoin paring losses slightly above $84,000. Ethereum declines in tandem with BTC. Ripple (XRP), meanwhile, paints a different picture.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Federal Reserve (Fed) and the Bank of Japan (BoJ) have just done something remarkably similar. Both central banks raised interest rates by 25 basis points (bps) last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.