CAD holds range ahead of BoC Business Outlook Survey – Scotiabank

The Canadian Dollar (CAD) is remarkably stable considering the carnage playing out in stocks. Spot has held a tight range close to Friday’s closing level throughout Asian and European trade. Heightened stock volatility is playing into the CAD’s fair value estimate more obviously now, with equilibrium moving back up to 1.4133 today, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

CAD little changed on the day

“That still leaves the CAD trading a bit cheap but the deviation from the equilibrium estimate has been falling over the past week. The BoC’s Q1 Business Outlook Survey is likely to make for soft reading today as businesses mull the implications of US tariffs. Soft jobs data Friday added to near-term BoC easing expectations but the Bank may need more time to consider growth/inflation risks before deciding on whether to cut.”

“USD/CAD price action was neutral Friday as the USD formed an inside range pattern. Intraday price trends remain neutral but a weak downtrend in the USD continues to develop, with the intraday and daily DMIs tilting USD-bearish for the first time since September. Spot gains appear to be stalling around 1.4270, ahead of key resistance at 1.4400/20. Support is 1.4025/30 and (major) 1.3940/50.”