CAD Range Intact Amid Tariff Headlines and Trade Tensions
The Canadian dollar has remained within its range against the US dollar despite recent tariff headlines. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the CAD is slightly softer due to broader USD gains and weaker oil prices.
New Canadian retaliatory tariffs on US goods have had a limited impact on the CAD's value, with USD/CAD trading near its fair-value estimate of 1.3862. This comes as Canada announced 15-50% tariffs on $20 billion worth of US products, effective September 8th.
The strategists also noted that trade tensions may hurt investment in North America, citing a report that Honda may not build any new plant in the region unless the CUSMA agreement is renewed. However, both sides are still discussing and have left room for an off-ramp if needed.