The Canadian Dollar (CAD) is a mild outperformer on the session, catching a modest bid alongside the Australian Dollar (AUD) and New Zealand Dollar (NZD), Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret note.
Trade talks aim for quick agreement
“Developments do reflect the breakdown—or reversal—in typical market behaviour since ‘Liberation Day’ which has seen the USD underperform in periods of equity market volatility while the CAD has outperformed. That trend may be moderating or reversing but that CAD retains a negative correlation with US stocks on our rolling 1-month study of daily returns of just over 50%.”
“While in Kananaskis yesterday, President Trump appeared to be on cordial terms with ‘Mark’. The president suggested that while he and the PM had differing ‘concepts’ on trade, a deal was still possible. PM Carney later said the two sides were aiming for a deal within 30 days. If so, the recent trend improvement in the CAD should extend.”
“The CAD is a little firmer on the session, extending its positive run on the USD, although spot is holding within yesterday’s range. Short-term trend dynamics are bearish, with a succession of lower lows and lower highs defining a clear bear trend. Oscillators remain bearishly-aligned across the short-, medium– and long-term studies for USD/CAD which implies limited potential for the USD to rally at present and ongoing pressure for the USD slide to extend. Resistance remains 1.3650/60. Support is 1.3540/50. Major support and the bear target if 1.3400/05.”