The Canadian Greenback (CAD) retains a delicate undertone however buying and selling patterns are carefully aligned with the core majors for essentially the most half, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
US/ Canada spreads slim
“USD/CAD’s push again to the 1.38 space leaves spot buying and selling fairly considerably above its estimated truthful worth (1.3614) as soon as once more, with the CAD discovering no assist from typical positives, such because the pro-risk temper or, extra significantly, the compression in short-term US/Canada money bond/swap spreads.”
“The 2Y yield hole is buying and selling close to the 100bps mark and edged briefly beneath that time Friday/Monday to the narrowest yield benefit for the USD since final November. Narrower spreads ought to at the least assist restrict upside motion within the USD within the near-term whilst commerce worries linger. Canada releases commerce information at 8.30ET.”
“USD/CAD technical indicators are combined. The USD traded firmly in late July and prolonged positive factors via 1.3750/00 the place I had anticipated firmer resistance. However USD positive factors look stretched on the every day oscillator and worth motion Friday shaped a bearish exterior vary reversal. That ought to imply a agency cap on the USD for now at 1.3880 and a return maybe to the sideways buying and selling vary (1.3550/1.3750 roughly) that prevailed via June/July.”
