The CAD is little changed on the session, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Spreads are headwind for CAD gains
“Yesterday’s brief rally in the USD was quickly reversed, dumping funds back under the 1.36 level where spot is consolidating. The positive risk backdrop is a mild support for CAD sentiment in the short run but the uptick in short-term US/Canada spreads and swaps over the past week or so are an impediment to further CAD gains, I think. Estimated fair value has edged a little lower this morning to 1.3634.”
“The USD’s failed attempt to hold gains above 1.36 yesterday casts a bit of a shadow over the short-term chart for USD/CAD. The market is sustaining a minor uptrend, supported by bullish-leaning DMIs on the intraday and daily oscillators but spot closed—and is holding—below the 200-day MA (1.3587) yesterday and that might suggest some constraint on USD gains for now. More rangey trade between 1.3550/1.3650 looks likely.”
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