The Canadian Greenback (CAD) is regular, holding close to yesterday’s excessive in opposition to the US Greenback (USD). The BoC’s ‘dovish maintain’ end result yesterday was largely as anticipated, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Pattern alerts are aligned bearishly
“Policymakers famous uncertainty round tariffs and their influence on Canada’s financial system as grounds for warning in the mean time. Canada has not responded to the most recent ratcheting up of commerce headwinds from the doubling in metal and aluminium tariffs. PM Carney mentioned the US and Canada are in ‘intensive’ negotiations however will retaliate if talks fail. None of that seems to be bothering the CAD because it takes benefit of the weak USD. Spot continues to commerce effectively under our estimated honest worth (1.3733).”
“New cycle lows for spot yesterday continues to reverse the late 2024/early 2025 surge within the USD. USD/CAD has closed decrease for 4 consecutive months (for the reason that early February leap to 1.48) and may stretch that to 5 web month-to-month USD losses by June. That will be a reasonably uncommon run for the CAD. The final time that occurred was 2020 when spot was reversing from the COVID leap to 1.47. That transfer prolonged to 1.20 the next yr.”
“We’ve famous beforehand that USD’s slide beneath the mid-1.37 space opened the door for a push to the 1.34 space (full retracement of that USD run larger over the flip of the yr). We had missed weekly development assist at 1.3645 however it’s not clear that this will supply a sustainable foothold for the USD. Pattern alerts are aligned bearishly throughout the intraday each day and weekly charts which recommend extra losses for the USD forward and a probable drop to that 1.34 space within the subsequent few weeks.”
