The Canadian dollar (CAD) is weak, lowering 0.3% against the US dollar (USD) and surrendering against most of the G10 currencies in a wide strength environment of the USD, extending the fall after the Fed meeting on Wednesday, says Shaun Osborne, head of FX de Scotiabank.
The broader differentials generate winds against the short term
“The perspective of the relative policy of the central banks seems to be dominating as a short -term CAD engine, expanding the differentials of interest rates in favor of the USD. The performance differential between the US and Canada to 2 years has expanded around 20 basic points in the last week, acting as a wind against which the recent rhythm of strength of the CAD has clearly slowed down.”
“We have pointed out that the CAD had been quoting something above our evaluation of its fair value. This last setback in the CAD has closed the gap, and now it is being negotiated much closer to our fair value of the USDCAD around 1.39. The calendar of domestic releases on Thursday is limited to the Boc financial stability report (10am et). There are no scheduled data releases before the employment report on Friday.”
“The USD/CAD has not yet managed to get out of its rank since mid -April, approximately limited between the support around 1,3750 and the resistance around 1,3900. A break would find additional resistance in the middle zone of 1.39, around the 61.8% setback of the rebound from September to February. We continue waiting for support around 1,3750.
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.
