The Canadian Greenback (CAD) continues the regular slide seen over the previous week however has held up comparatively nicely to this point immediately within the face of President Trump’s newest tariff strikes, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
US sticks 35% tariff on some exports
“PM Carney stated he was dissatisfied however Canada will proceed to barter. Canada’s USMCA exemption stays intact, as do beforehand introduced sectoral tariffs. The BoC estimated just lately that the general efficient tariff price on Canadian exports to the US was round 5%. That can rise barely on the again of the most recent developments.”
“USMCA provides Canada some safety from broader tariff headwinds, not less than for now, and can enable the BoC to stay sidelined for the foreseeable future because it assesses the affect of the US’ makes an attempt to reorder international commerce. With the USD up greater than 2% from final week’s low and the CAD straying from our FV estimate (1.3752), spot could possibly regular within the brief run.”
“However short-term features are trying stretched and the USD rally has paused via European commerce which can enable the CAD to catch its breath. Nonetheless, the USD’s features via 1.3750/00 the place I had anticipated higher resistance implies extra upside threat for the USD within the subsequent few weeks. The USD is buying and selling above the 23.6% retracement resistance (1.3836) from the 1.48/1.35 decline and holding above there via the shut of the week will level to additional features in direction of 1.39/1.40. Assist is 1.3810/20.”
