Tariff worries are easing—for now, at least—which is allowing the CAD to stabilize.
The hefty swing lower in the USD from the early week peak may not extend much further for now but the sell-off is material, Scotiabank's Chief FX Strategist Shaun Osborne notes. Firm USD support likely in mid/upper 1.42s Unless trade talks deteriorate significantly again, there is a chance that the USD/CAD peak reached Monday near 1.48 will represent a significant high-water mark for spot.
Short-term spreads are about 50bps wider than early November, however, and the huge US/Canada interest rate differential will limit just how much of a rebound the CAD will see in the next few weeks at least. Spot fair value has eased to 1.4391, driving a minor, and unusual by recent standards, CAD overvaluation relative to its estimated equilibrium. CAD-positive signals are piling up on the charts.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
USD/CAD Rebounds as Trump Denies Pared Tariff Plans, Trudeau Resignation ExpectedThe USD/CAD currency pair rose near 1.4345 in early Tuesday trading as President-elect Donald Trump refuted reports of scaling back his tariff policy, while Canadian Prime Minister Justin Trudeau is anticipated to announce his resignation.
Read more »
USD/CAD Rises Sharply as Investors Brace for Trump's Tariff PlansThe USD/CAD pair surges to near 1.4430 on Friday, driven by investor caution ahead of Trump's inauguration and expectations of increased tariffs on Canadian goods. The Canadian Dollar weakens as market participants grapple with the potential impact of a trade war on the Canadian economy.
Read more »
USD/CAD Climbs Sharply as Trump's Tariff Threats Cast Shadow on Canadian EconomyInvestor caution and anticipation of Trump's 25% tariff increase on Canadian exports drive the USD/CAD pair to near 1.4430. Softer CPI data fuels expectations of Fed rate cuts, strengthening the US Dollar further. Canadian Dollar weakens as the looming trade war dampens economic outlook.
Read more »
USD/CAD Trades Cautiously Near 1.4300 as Trump Threatens 25% Tariff Hikes on CanadaThe USD/CAD pair trades cautiously near 1.4300 in Wednesday's European session amid concerns over potential 25% tariffs on Canada by US President Donald Trump. While Canadian Prime Minister Justin Trudeau has stated the government's readiness to respond, the Loonie remains under pressure. Investors anticipate a 25 basis point interest rate cut by the Bank of Canada later this month, fueling further divergence from the Federal Reserve's stance.
Read more »
USD/CAD Strengthens on Tariff Threat and BoC Rate Cut ExpectationsThe USD/CAD exchange rate is rising due to growing speculation that President Trump's advisors will impose 25% tariffs on Canada and Mexico starting February 1st. The Canadian Dollar (CAD) is also weakening as the Bank of Canada (BoC) is anticipated to cut interest rates by another 25 basis points on Wednesday, widening the interest rate differential with the US Federal Reserve.
Read more »
USD/CAD posts modest gains above 1.4350 amid Trump tariff uncertaintyThe USD/CAD pair trades with mild gains around 1.4380 during the early Asian session on Tuesday.
Read more »