USD/CAD: Supported by soft stock market – Scotiabank
Tender stocks are helping withhold the Canadian Greenback (CAD) tone defensive however whether weaker equity markets are ample of a justification for using the CAD greatly lower for the time being remains to be viewed, Scotiabank’s FX strategist Shaun Osborne notes.
Heightened CAD volatility is imaginable
“Thinner liquidity Monday, when native markets are closed, would possibly perchance maybe initiate the door for heightened CAD volatility essentially based on silent weaker equities however that is no longer basically something that is nicely grounded in fundamentals.”
“Beyond weak stocks, underlying factors (spreads, uncouth oil and the usual USD tone) include moved in the CAD’s favour in the previous few days, leaving online page buying and selling a large figure above our honest impress estimate (1.3785). That must again constrain the USD’s ability to push elevated to a couple extent however the CAD is no longer going to rep too indispensable ground whereas stocks are buying and selling defensively.”
“The CAD bought clobbered the earlier day, using online page to terminate to the dumb 1.2023 excessive upright below 1.39. Space has consolidated below the figure this morning however there’s scant signal of any CAD-sure impress traits on the intraday chart. Barely, the USD looks to be to be pausing before one other strive elevated from a technical point of leer. Enhance is 1.3790/00. Resistance is 1.3890/00 and 1.40.”
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