The Canadian dollar (CAD) remains relatively stable in today’s trading session, according to Scotiabank’s Chief FX Strategist Shaun Osborne.
Despite a brief rally in the USD yesterday, the CAD is currently consolidating below the 1.36 level. While positive market sentiment is providing some support for the CAD in the short term, the increase in short-term US/Canada spreads and swaps over the past week is hindering further CAD appreciation. Osborne believes the estimated fair value has slightly decreased to 1.3634.
In terms of USD/CAD trading, the USD’s failure to maintain gains above 1.36 is putting some pressure on the short-term outlook. Although there is a minor uptrend supported by bullish indicators, the spot price closed below the 200-day moving average (1.3587) yesterday, indicating potential resistance for USD gains. As a result, Osborne predicts a trading range between 1.3550 and 1.3650 in the near future.
Overall, while the CAD is currently facing challenges due to spreads and market dynamics, investors should monitor the ongoing trends in US/Canada spreads and the USD/CAD exchange rate to make informed decisions regarding their investments.