CAD Stands Firm Amid Trade Tensions
Despite renewed US-Canada trade tensions and targeted import bans, the Canadian Dollar (CAD) has remained steady, according to Scotiabank strategists Shaun Osborne and Eric Theoret. They attribute this resilience to improving CAD fundamentals, which have contributed to a lower fair value estimate for USD/CAD near 1.3736.
The strategists note that the CAD's response to recent developments in the trade spat has been stoic, with little impact on its value. Specifically, President Trump's weekend post about Canada's 'currency dollar imbalance' was seen as having no significant effect on the CAD.
However, underlying technical dynamics are USD-bearish, with trend momentum indicating a resuming downtrend from the mid-year peak for the US Dollar (USD). This suggests that moderate USD gains through the mid-1.38s could attract selling interest, and USD support is seen ahead of a decline back to the 1.3500/50 region.