As the Chief FX Strategist at Scotiabank, I have closely observed the Canadian Dollar (CAD) remaining steady in the face of recent events. The Bank of Canada’s rate cut was anticipated, but the market is now looking to the Federal Reserve to follow suit in the near future. Additionally, the end of the NDP’s support agreement with the Liberal government did not significantly impact the CAD.
While the dissolution of the agreement does not immediately signal an early election, it does mean that the Liberals will need to seek support from other parties on a case-by-case basis. As Parliament reconvenes in September, the CAD’s performance will largely depend on the upcoming US jobs report.
From a technical standpoint, the USDCAD pair has shown some weakness as it dropped from resistance levels and broke short-term consolidation support. If intraday weakness persists below 1.3495, we may see further losses for the USD in the short term.
Analysis Breakdown:
- The Canadian Dollar remains resilient despite expected rate cuts and political developments.
- The end of the NDP’s agreement with the Liberals may impact future legislative decisions.
- Market focus shifts to the US jobs report for short-term CAD trends.
- Technical analysis suggests potential USD losses if support levels are breached.