The Canadian Dollar (CAD) is losing ground in line with the majors so far today and is outperforming its commodity peers (AUD and NZD) by a considerable margin as a result, notes Shaun Osborne, Chief FX Strategist at Scotiabank.
CAD falls as recovery momentum fades
“The CAD rally has lost momentum as short-covering demand has faded, at least for now. Markets are primarily focused on developments in the US this week, but there is also significant risk on the calendar for the CAD, even though the Bank of Canada’s policy decision tomorrow is widely expected to result in a 25 basis point cut in the Bank’s 4.50% target rate.”
“A dovish statement and press conference will support market expectations that rates will continue to fall for the rest of the year (swaps imply a further 50 basis point cut is expected beyond this week’s decision).”
“USD corrective gains are likely to extend to the mid/upper 1.35s in the near term at least. A bullish ‘hammer’ signal on the weekly charts through last Friday suggests that the risk of a more significant USD bounce in the coming weeks should not be excluded. Firmer USD resistance may develop in the mid/upper 1.36s. Support at 1.35000/05.”
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.
