Canadian Dollar: Overbought US Dollar eyes 1.40–1.41 range – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret highlight renewed Canadian Dollar (CAD) weakness as softer Oil prices and geopolitical concerns push USD/CAD to new year-to-date highs. They describe a “heads I win, tails you lose” backdrop for the CAD, with the pair breaking above the March peak. Short-term technicals flag an overbought USD but still point toward a test of the 1.40–1.41 congestion area.
CAD pressured as Oil and risk weigh
"The CAD probed the 1.39 area yesterday around the Bank of Canada policy announcement but could not hold that advantage. While Governor Macklem sounded cautious on the policy outlook at the post-meeting press conference, CAD losses only really started to pick up in late afternoon trade once markets started to fret about more US strikes on Iran. "
"Now, though softer oil prices appear to be the primary driver of CAD losses overnight, with the CAD selling off in line with the NOK as Brent and WTI prices dropped."
"It feels a bit “heads I win, tails you lose” for the CAD and this latest move leaves spot trading at a new cycle high for the year and the USD at its best level since early December. Firmer stocks and a lower VIX might help steady the CAD but there’s not much love at all out there for the CAD right now."
"Neutral/bearish—USD-negative price signals that developed earlier in the week failed to provide any lift for the CAD and spot gains through the March peak at 1.3967 leave the CAD looking vulnerable to more losses again."
"The USD is overbought but trend momentum remains bullish for a push into the 1.40-1.41 congestion range from Q4. Support is 1.3900. "
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
SpaceX (SPCX.US) Starship's 15th Test Flight: Booster recovery failed for unknown reasons; first orbital round-trip mission still awaits upper stage "tower catch" landing
On Friday local time, SpaceX conducted its 15th Starship flight mission in Texas.
Unlike Elon Musk’s “One Price” Approach: Anthropic (ANT.US) Roadshow Pricing Inquiry at $70-78, Institutional Investors Become the True Decision Makers in IPO Pricing
Anthropic will launch what is set to be the largest IPO in history next week, aiming to take this title from SpaceX. However, unlike Elon Musk’s conglomerate, large investors will have greater influence over its IPO pricing amid the ongoing turbulence in the artificial intelligence (AI) market.
Both are Tech Giant IPOs, Why is Anthropic's Listing Valuation More Conservative Than SpaceX?
Unlike SpaceX's fixed pricing model, Anthropic adopts the traditional roadshow approach, granting more pricing power to institutional investors. Due to factors such as the Nasdaq downturn, Federal Reserve rate hikes, and AI oversupply, the market environment is under pressure, and previous expectations for a $2 trillion valuation have faded. Analysts point out that the difference in pricing strategies between the two companies essentially reflects the depth of their relationships with the Wall Street capital markets.
Inflation Pressures Persist, Fed Rate Hike Expectations Intensify, AI Investment Risks Increase Financial Stability Concerns
As U.S. inflation accelerates again, Federal Reserve officials have intensively released hawkish signals this week, further strengthening market expectations for a rate hike in December and opening the door to another rate hike in January next year.
Crypto prices
More
