The Canadian Greenback (CAD) is little modified on the session. Broader market sentiment is comparatively impartial, with European shares slightly firmer whereas US fairness futures are at the moment buying and selling decrease. Our truthful worth estimate for USD/CAD has edged slightly decrease into the top of the week (1.3839) as components driving the estimate edge marginally extra supportive for the CAD. With markets total pretty calm and spot buying and selling close to its estimated equilibrium, slender vary buying and selling might prolong at the moment, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
GDP in focus forward of BoC
“This morning’s Canadian GDP information will probably mirror sluggish development for March and Q1 total. Development headwinds stay unabated from US tariff developments whereas wildfires in Alberta can also begin to impinge on oil manufacturing. Very comfortable information at the moment might bolster market expectations for a fee reduce from the Financial institution of Canada subsequent week. Swaps are at the moment pricing in solely 6-7bps of easing threat.”
“USD/CAD is monitoring slightly larger on the week total however web USD positive aspects will not be sufficient to problem the bearish implications of final week’s web USD decline (bearish “engulfing” line on the week chart). Additionally, the online drop within the USD seen in yesterday’s session total fashioned a day by day exterior vary reversal patten on the chart. Pattern momentum alerts stay bearish on the day by day and weekly research however have eased to impartial on the intraday oscillator.”
“That will imply slightly extra vary buying and selling for funds within the quick run however the broader, technical pointers stay tilted to the draw back. That ought to imply restricted scope for USD positive aspects (resistance at 1.3850/60) and slightly extra weak point within the USD within the days forward. Assist is 1.3785 and 1.3750.”
