The Canadian Greenback (CAD) is buying and selling marginally decrease vs. the US Greenback (USD) whereas performing effectively towards many of the G10 currencies, its efficiency insulated by the Canadian greenback’s relationship to grease costs, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Fundamentals stay supportive
“The CAD/crude correlation is traditionally optimistic and oil value positive aspects current a dependable supply of help for the Canadian greenback. CAD fundamentals have improved considerably this week, because the notable enchancment within the outlook for relative central financial institution coverage has been compounded by significant oil value positive aspects.”
“Our FV estimate for USD/CAD has fallen to a contemporary native low, and is at the moment at 1.3613, reflecting narrowed US-Canada yield spreads and better costs for crude. Close to-term home danger lies with the discharge of producing gross sales at 8:30am ET, and Canada will host the G7 leaders in Kananaskis, Alberta from June 15 to 17.”
“Technicals stay bearish, and USD/CAD briefly pushed under 1.36 earlier than its modest sentiment pushed rally. The positive aspects have been minimal nevertheless, and we’d anticipate near-term resistance nearer to 1.3680. We word that the RSI continues to be fairly bearish within the mid-30s, having bounced off of the oversold threshold at 30. We proceed to spotlight the absence of any significant help ranges forward of the September low at 1.3420. Close to-term help is anticipated within the 1.3600/1.3580 space.”
