The Canadian Dollar (CAD) is all but unchanged on the session as the country goes to the polls. Today’s Federal election results will start trickling in from 7-7.30ET for the Atlantic provinces when the polls close, then tumble out of vote-rich Quebec and Ontario after 9.30ET (when central Canada also reports), Scotiabank’s Chief FX Strategist Shaun Osborne notes.
CAD trades flat on the day
“There are 200 seats up for grabs in these two provinces and their results will very likely give a strong indication as to which way the country is voting. BC and Yukon voting ends at 10ET. The election race appears to have tightened in its final days, with polling showing the Liberals’ lead over the Conservatives narrowing to two points (41-39%). CAD o/n vol has picked up (10.8%) but pricing is not especially elevated. The election outcome is unlikely to move the CAD materially, assuming a majority win for either party.”
“The biggest risk is perhaps that the result delivers a narrow minority government which may lead to the perception that Canada’s negotiating leverage with the US over trade somewhat compromised. Canadian Retail Sales were as soft as expected in February, data Friday showed. But the preliminary report for March indicated a solid 0.7% rise. Sales still look soft for Q1 overall. Spot continues to hold close to our fair value estimate (1.3826 today).”
“The daily charts reflected a couple of potential bullish cues for the USD last week—a bull ‘hammer’ signal Monday and a firm bid for the USD off Wednesday’s intraday low. But there has been no obvious sign of a pick-up in demand for the USD. Daily/weekly trend strength signals remain bearish for the USD, suggesting limited scope for gains. Resistance is 1.3950/55 and 1.4025/30. Support (major) is 1.3745. Technicals still favour fading USD gains.”