He Canadian Dollar (CAD) little changed on the day, notes chief FX strategist Shaun Osborne.
Limited upside for the USD
“A moderate narrowing in US-Canada spreads is helping to keep my spot fair value estimate marginally lower (1.3703 today), which should mean limited upside scope for the USD, all else equal. The summary of policy deliberations surrounding the Bank of Canada’s decision to cut rates in July, released yesterday, revealed nothing new for markets.”
“Policymakers are concerned that a weaker labour market will dampen consumer demand and, echoing the Bank’s communications around the decision, are now more focused on downside risks to the outlook. More cuts lie ahead.”
“The pair’s losses from Monday’s highs above 1.39 are showing signs of stabilizing in the lower 1.37 area. Price action suggests consolidation rather than a reversal in the USD at this point. Note that the USD is finding some support around the 1.3725 retracement (61.8% Fibonacci of the 1.36/1.39 upside move). I expect resistance at 1.3375/95. A break below 1.3725 targets 1.3670/75.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
