US/global recession risk drive the USD/CAD for now – Danske Bank
|
USD/CAD had an eventful start to April, dropping to the 1.40 level following broad USD weakness sparked by Trump's tariffs on Liberation Day, Danske Bank's FX analyst Frederik Romedahl reports.
Waiting for the next BoC meeting
"The cross concluded the week higher, around 1.42. Looking ahead, April features more event risks. On April 16, the BoC meeting takes place, during which a new MPR will also be published. Following the much weaker-than-expected Canadian job data on Friday, markets are now pricing in 13bp worth of cuts compared to 5bp before the release."
"Hence, we are likely in for yet another close call as has the been the case over the past half-year. April wraps up with the federal election on April 28. Retaliating against Trump's tariffs, Liberal PM Carney stands as the favourite to win the election, with prediction markets assigning a 72% probability of Carney clinching the victory."
"Importantly, Trump's tariffs and market perceptions of US/global recession risk will be the primary drivers of USD/CAD in the short term."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.