The Canadian Dollar (CAD) has weakened despite a slightly lower USD, with Scotiabank's Chief FX Strategist pointing to ongoing risks for the CAD. BoC DG Gravelle confirmed the central bank will end its quantitative tightening program by mid-year and revert to regular asset purchases. He also cautioned that US/Canada trade tensions could negatively impact the Canadian economy through inflation and slower growth. The BoC will provide further analysis on the impact of tariffs at its January 29th policy decision. Technicals suggest a slightly bullish short-term outlook, but USD resistance around 1.4465 remains a key factor.
The Canadian Dollar has drifted steadily lower since testing the 1.43 area mid-week. The USD is still trading slightly lower on the week, however, adding to last week’s small net loss despite obvious risks to the CAD, Scotiabank's Chief FX Strategist Shaun Osborne notes. Spot is back to pivoting around the 1.
In other remarks, Gravelle commented that US/Canada trade tensions risked having a 'big, negative' impact on the Canadian economy via higher inflation and slower growth. He said the BoC will detail more of its analysis on the impact of tariffs with the January 29th policy decision. Spot is back to pivoting around the 1.44 point. Short-term patterns lean somewhat bullish after the rejection of the 1.
Canadiandollar USD Boc Quantitativetightening Tradetensions
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