Higher than anticipated GDP information for Q1 supplied a little bit of a raise for the CAD Friday. The information noticed some marginal repricing of swaps for Wednesday’s BoC coverage choice and a few Canadian banks reversed their forecast for a lower to a maintain—according to Scotia’s view of no change, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
BoC anticipated to carry on Wednesday
“Beneath the hood, the Q1 information regarded much less spectacular and development prospects stay mushy—preliminary indications for April GDP point out an increase of 0.1%. Nonetheless, amid all of the uncertainty about commerce and tariffs, policymakers might effectively determine to take a seat this one out. Swaps pricing suggests round 20% danger of a lower. PM Carney can be pushing for intra-provincial commerce liberalization to assist offset the influence of US tariffs in conferences with Canadian premiers at the moment. Progress right here could be useful in boosting home development prospects to offset the influence of US tariffs.”
“After struggling to carry the push via USD assist at 1.3745/50 final week, the CAD begins the brand new week off again beneath 1.37 and pushing the USD right down to marginal new cycle lows (lowest since early October). The broader downtrend within the USD could also be accelerating slightly, the charts recommend. Every day and weekly charts replicate USD-negative value alerts forming final week and the intraday, each day and weekly pattern oscillators stay USD-negative.”
“That retains technical dangers targeted clearly on the draw back for USD/CAD and may imply strong resistance on any pop within the USD in direction of 1.3850/1.39—if the USD can get there in any respect. Help is finally week’s 1.3685 low is beneath strain and there may be little beneath there forward of a drop again to 1.34/1.35.”
