|

Canadian Dollar: Losses against US Dollar look limited – Scotiabank

Scotiabank’s Global FX Strategy team, including Shaun Osborne and Eric Theoret, notes that the Canadian Dollar is flat against the Dollar and underperforming other G10 currencies due to its differentiated risk profile. They highlight that USDCAD remains driven by relative Bank of Canada and Federal Reserve policy expectations, with key domestic events including a Deputy Governor speech, the Financial Stability Report, and Q1 GDP data later this week.

Canadian Dollar lags broader G10 gains

"The CAD is trading flat to the USD, failing to capture some of the broader themes that have propelled other G10 currencies. The CAD’s relative underperformance is understandable, and reflects its differentiated risk profile that leaves it less vulnerable to weakness in periods of risk aversion but also less prone to strength in risk appetite."

"The near-term focus for the CAD remains centered on the outlook for relative central bank policy, given the material widening in interest rate differentials that has reflected a softer repricing of the BoC’s path along with a firming in the outlook for the Fed."

"The BoC’s calendar includes Dep. Gov. Vincent’s speech scheduled for Tuesday and the Financial Stability Report set for release on Thursday. In terms of data, Q1 GDP is set for release on Friday, along with the monthly print for March. "

" Bullish—the RSI is bullish, climbing into the mid-60s as it creeps toward the overbought threshold at 70. The 200 day MA (1.3812) appears to be offering some short-term congestion with some resistance and inability to extend much beyond the trend level."

" Additional resistance appears limited ahead of 1.39. Conversely, we see little scope for support ahead of 1.375, around the 50 day MA (1.3749)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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

GBP/USD holds range below 1.3650 amid Iran risks

GBP/USD extends its sideways consolidative price move for the second straight day and trades below 1.3650 in Tuesday's European session. The US Dollar is looking to build on its modest recovery amid US sanctions on Iran, acting as a headwind for the pair. The lack of follow-through selling warrants some caution for bearish traders.

EUR/USD struggles near 1.1650 as USD recovers amid Mideast woes

EUR/USD is struggling to gain traction, while trading near 1.1650 in European trading on Tuesday. The pair fails to find support amid a modest US Dollar recovery as rising oil prices, elevated bond yields, and escalating Middle East tensions fuel risk-off trades. Upbeat Germany IFO Survey fails to inspire Euro bulls.

Gold remains depressed below $4,650 on firmer USD, Fed risks, and Middle East tensions

Gold remains on the back foot below $4,650 through the first half of the European session. However, the lack of follow-through selling warrants caution before positioning for an extension of the intraday retracement slide from the $4,700 neighborhood, or the highest level since May 14, touched earlier this Tuesday. The US Dollar is seen building on its recovery from a three-month low as inflation risks stemming from volatile energy prices keep bets for at least one interest rate hike by the US Federal Reserve on the table.

Bitcoin tops $80,000 as US Treasury fights high yields – AERO, VIRTUAL rally

Bitcoin extends gains above $80,000 as broader market risk-on sentiment persists. The scarce asset could extend its rally as the US Treasury combats high yields in the long-dated bond market, with further interventions on the horizon. Aerodrome Finance (AERO) and Virtuals Protocol (VIRTUAL) emerged as top performers over the last 24 hours.

The forex market is switching to a ‘debasement trade’
The US dollar has stabilised near three-month lows thanks to a rapid recovery in Treasury bond yields. Yields on 30-year bonds are returning to the levels seen following the Treasury’s announcement that it was increasing the minimum purchase volume to $4 billion. The greenback got support from falling stock indices, the continued rally in Brent crude, and positive signals from the US economy.
$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.