USD/CAD edges lower amid year-end CAD trends – Scotiabank

FXStreet Insights Team FXStreet

USD/CAD notched up a slightly lower low in the current down cycle yesterday and while the CAD is a little softer this morning, it is still bucking its usual trend of seasonal ambivalence in December, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD weakness limited despite seasonal patterns

"Late year trends tend to be CAD-negative but, in broad terms, CAD losses typically even out in December (before losses resume in in the new year). The CAD weakens more often than it gains (but only marginally so) and average returns for the month are about as close to flat as you can get. Nov is the CAD’s worst month of the year while Apr (quite reliably) is the best. Despite the intraday spot gains, USD/CAD is (currently) trading just below our fair value estimate (1.3794) today."

"Scope for additional USD gains may be limited absent further bullish developments. There was nothing new on the monetary policy front from yesterday’s speech by Gov. Macklem. He reaffirmed that the benchmark rate at 2.25% was the appropriate level and that inflationary pressures appeared contained."

"USD gains from the intraday low yesterday are putting the short-term downtrend in funds under pressure. The USD selloff has looked a little stretched and a mild correction may develop above 1.3790/00 to the mid/upper 1.38s. Support is 1.3725/30."

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.

EUR/USD remains weak near 1.1800

EUR/USD remains on the back foot on Thursday, trading close to the 1.1800 support ahead of the opening bell in Asia. The pair’s pullback comes amid further gains in the Greenback, while investors keep assessing the ECB’s decision to leave its policy rates unchanged

GBP/USD falls to new lows near 1.3530

GBP/USD extends Wednesday’s pullback on Thursday, easing lower towards two week lows around the 1.3530 area. Ongoing strength in the Greenback and the dovish hold from the BoE at its earlier meeting are keeping demand for the British Pound on the defensive for now.

Gold fails to sustain gains above $5,000 for third consecutive day

Gold is back under pressure on Thursday, slipping back towards the $4,800 region per troy ounce. A firmer US Dollar is weighing on the yellow metal, even as the broader mood remains risk off. That said, falling US Treasury yields across the curve are helping to cushion the downside and, for now at least, are limiting the depth of the pullback.

Strategy's Bitcoin treasury in focus as MSTR crashes alongside crypto market

Strategy (MSTR), the largest corporate holder of Bitcoin (BTC), is in focus ahead of its earnings call on Thursday amid an intensifying crypto market sell-off. Also caught in the headwinds is the MSTR stock, trading at $114 at the time of writing, down over 12% intraday.

The AI mirror just turned on tech and nobody likes the reflection

Tech just got hit with a different kind of selloff. Not the usual rates tantrum, not a recession whisper, not even an earnings miss in the classic sense. This was the market staring into an AI mirror and recoiling at its reflection.

Breaking: Bitcoin slips below $70,000 as falling knife scenario in play

Bitcoin (BTC) price dips below $70,000 on Thursday, having corrected nearly 20% for this year. Market momentum turned extremely bearish, with technical indicators pointing to further downside toward the next key support at $65,000.