With a light week in terms of economic data, the Canadian dollar has been treading water for the first few days of this week, trading between 1.3690 and 1.3790 versus the US dollar. However, the latter half of the week includes the Bank of Canada’s (BoC) latest Summary of Deliberations, slated to be released on Wednesday, as well as Canadian Retail Sales coming out on Friday.
According to Scotiabank Chief FX Strategist Shaun Osborne’s notes from earlier in the week, the Canadian dollar is showing a surprising resistance against the broadly stronger US dollar. However, the market, from a technical standpoint, is still leaning in favor of USD strengthening against the Canadian dollar.
Most analysts see the USD/CAD continuing to trade in the 1.36 to 1.38 range for the near term. The two catalysts the markets are looking for are the BoC’s next policy meeting in early July and any notable indications of a weakening US economy, which would provide clarity on the Fed’s rate cut timing. A second consecutive rate cute by the BoC in July and the Fed continuing to push back rates could see the Canadian dollar test the 1.38 celling ag.
The Canadian dollar is currently trading at 1.3705 CAD against the US Dollar.
