- The Canadian dollar has fallen significantly during the trading session on Tuesday against the Swiss franc, which does make sense considering that Donald Trump has reiterated the idea of tariffs coming to Canada on March 4th, and nothing has changed in his opinion.
- So, the Canadian dollar has been beaten up a little bit. It’ll be interesting to see how long this lasts, but it’s particularly interesting to watch this against the Swiss Franc, because to begin with, you’re getting rid of the US dollar in the equation, and you start to look at it from a risk on or perhaps a risk off situation. If we see the Canadian dollar fall, and there are a lot of concerns about global trade, it does make sense that the Canadian dollar drops against the Swiss Franc overall.
Trading Range
Now, all of that being said, we’ve been in the trading range since August of last year between 0.62 and 0.64. We are approaching that 0.62 level again, and it’s probably worth noting that the stochastic oscillator is starting to cross in the oversold condition in this pair meaning the 28th, we will get GDP numbers coming out of Canada. And that will obviously have an influence on this pair. But I think more than anything else, we’re watching what’s going on between the Americans and the Canadians. And that has a bigger influence on the Canadian dollar in general. After all, something like 82-ish percent of Canadian exports end up in the United States. It might even be higher than.
So, if trade suddenly gets cut off, Canada’s in serious trouble. That would of course probably send this pair plunging. Now the question is what would happen with the Swiss franc overall? I don’t think the Swiss franc gets strong, at least not as strong as you would normally think, mainly due to the fact that the Swiss National Bank has recently panicked cut by 50 basis points. And I think they might still be a bit concerned. So, with all of that, an interesting pair worth watching, the 0.62 level will be crucial. If we can get a bounce, then maybe it’s a nice range bound trade. If not, then we’re probably going to drop to the 0.60 level.
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