The Canadian dollar (CAD) was little changed on the day. Sean Osborne, chief currency analyst at Scotiabank, said weakness in stocks contrasted with a stable market while short-term cash flows expanded.
CAD returns to average 1.39
–Mixed near-term drivers for CAD and limited domestic data (morning trades). With CAD’s launch, there is little hope for market improvement. Cross-flow (EUR/CAD below 1.47 for the first time since July) could provide some minor support for the loonie, but even a slight decline in USD/CAD would clearly push spot away from estimated fair value (1.4032 today).
“Short-term trend momentum has weakened to near neutral levels following the USD’s drift back from its early week peak. Spot continues to find support around 1.3950/60 but there are some tentative, CAD-positive signs on the weekly chart, with the USD failing to hold last week’s break above 1.4040 resistance (at this point).”
“USD weakness below 1.3950 could see spot ease back to the mid/upper 1.38s. Resistance is 1.4000/10.”
