The Canadian Dollar (CAD) is marginally higher on the day so far. A slightly firmer risk appetite and a small rebound in crude oil prices are helping on the margin, but in the absence of any real improvement in spreads, which are the drag on CAD performance at the moment, there is little chances of the CAD gaining a lot of ground in the short term, says Shaun Osborne, Chief FX Strategist at Scotiabank.
USD remains heavily overbought
“The fair value of USD/CAD is estimated at 1.3932 this morning. Governor Macklem reiterated on Monday that Canadian rates were falling, but the pace, timing and extent of monetary easing were still to be determined. The Governor and the Senior Deputy Governor Rogers are addressing parliamentary committees today (15.30ET) and tomorrow on recent policy decisions.”
“The intraday chart offers the possibility of a—slight—CAD improvement in the next day or two after the spot’s move so far this week established a minor double top (1.3905) and pushed below the bottom (1.3883 ) between the two tests of the lows of 1.39. That could mean that USDCAD retreats to the 1.3860 area.”
“The USD remains heavily overbought, so even minor losses deserve attention as they could tip the balance in favor of a deeper correction in the USD’s recent gains.”
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.
