The CAD has recovered about half of the post-FOMC decline seen yesterday afternoon. Political uncertainty is not unique to Canada, with a deal to avoid a US government shutdown collapsing over the weekend after President-elect Trump criticized the plan, notes Shaun Osborne, chief FX strategist at Scotiabank. .
CAD stabilizes on the day
“Legislators have limited time to come up with a viable alternative. At this point, a prolonged government shutdown seems unlikely, but the issue is helping to take some pressure off the CAD, if only temporarily. The room for CAD gains is limited by the weak risk backdrop and firmer US yields. USD declines to the low/mid 1.43s will likely remain well supported for now.”
“The USD is consolidating yesterday’s solid gains. The spot rate has retreated somewhat from Wednesday’s peak and short-term price signals are leaning bearish, with the market forming an “evening star” reversal pattern on the intraday candlestick chart.”
“USD losses may extend to test minor support at 1.4320, but a bullish alignment of trend strength signals in the short, medium and long-term oscillators suggests that the scope for USD losses is limited.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
