USD/CAD dips under 1.43 remain well supported on the charts – Scotiabank

The Canadian Dollar (CAD) is softer on the session, edging back through the low 1.43 area to the mid-1.43s. President Trump said last week that tariffs are coming for Canada but both he and PM Carney put a positive spin on the call they had late last week on trade. PM Carney apparently communicated to provincial leaders that tariffs imposed on Canada may come at the lower end of the scale and may not be applied broadly across the economy, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

CAD slips despite hopes that Canada may avoid worst of tariffs

"For now though, the CAD is facing a waiting game ahead of Wednesday’s announcement and then the gaming out of how Canada might be able to negotiate its way out of tariffs. The CAD is holding up a little better than its commodity cousins, the AUD and NZD, which are underperforming broadly across the major currency space, weighed by broader markets sentiment." 

"Canada releases trade and jobs data this week; soft jobs data may tilt risks towards more BoC easing but policy makers will want to assess tariffs and their impact before pulling the trigger. USDCAD’s estimated fair value remains steady in the low 1.41 range, leaving spot more than one standard deviation above its estimated equilibrium." 

"USD/CAD gains from last week’s low and USD support (near 1.4235) represents a failed test of the 100-day MA (1.4280 today) and tips near-term trends towards a little more USD strength. USD dips under 1.43 remain well supported on the charts, amid still USD-bullish trend sentiment. Intraday gains through 1.4330 look set to extend back towards 1.44, or possibly higher (to 1.4450/60) in the short run."