The Canadian Dollar (CAD) has found modest supply lagging behind its commodity cousins, even as President-elect Trump repeated his threat to impose huge tariffs on Canada, Mexico and China in his first major television interview that aired during the weekend. The scope for CAD gains is limited, says Shaun Osborne, Chief FX Strategist at Scotiabank.
CAD strengthens modestly
“Despite a solid gain in November jobs, there were enough holes in Friday’s labor market report (government jobs drove full-time gain, wage growth slowed and—most importantly—the unemployment rate rose). to support expectations that the Bank of Canada will cut its policy rate by 50 basis points this week. Markets are close to fully pricing in a 1/2 point (46 basis point) cut, so the result may not weigh. significantly on the CAD.”
“There is likely limited room for the CAD to rally around the BoC decision unless the Bank opts for minor easing or signals a more cautious outlook for policy amid developing uncertainties. Intraday price is leaning somewhat bullish for CAD. CAD sold off at the end of last week, retesting the late November peak at 1.4178 in effect.”
“The USD has formed a bearish engulfing session on the 6-hour chart during European trading, however, suggesting that a minor peak has been reached and that the CAD could improve a little further. Still, momentum signals USD uptrend trends are aligned at the short-, medium- and long-term DMIs, meaning limited room for USD corrections (perhaps only to the 1.4025/50 area in the near term) and continued pressure for strength of the USD.”
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.
