CAD steady versus USD – Scotiabank

The Canadian Dollar (CAD) is little changed over the weekend vs the US Dollar (USD). It remains to be seen what Mark Carney’s win in the Liberal leadership election means for Canada and markets. The formal handover from Trudeau will take place in the next few days and Carney might then decide call an election, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Technical signals remain somewhat mixed

"Or he could try and hold out to see if polls continue to shift in his favour. Meanwhile, President Trump will stick with tariffs on steel and aluminum, due Wednesday, Commerce Sec. Lutnick said at the weekend, as questions remain around the chaotic roll out of tariff action from the White House recently." 

"The CAD may be able to stabilize in the short run. With 25% borders tariffs delayed until April at least, the USD is overvalued relative to the tariff regime that we have. Scope for CAD gains is not all that great; spreads have narrowed but remain significantly in the USD’s favour ahead of Wednesday’s BoC decision (when another 1/4-point trim to the overnight rate is likely)." 

"A generally weaker USD undertone should help put a floor under the CAD for now. Technical signals remain somewhat mixed. Trend momentum continues to favour the USD but there is resistance to USD gains between1.4475/1.4525 while support for the USD remains 1.4250 and 1.4150."