The Canadian Dollar (CAD) is holding steady today as the exchange rate continues to trade within a narrow band. Recent global events have not significantly influenced CAD market sentiment; however, the possibility of reduced trade friction, decreased market fluctuations, and stronger equity values offer slight tailwinds for the CAD, according to Shaun Osborne, Chief FX Strategist at Scotiabank.
Current Trading Band Holds Firm
“These factors should, at a minimum, maintain the CAD’s recently observed positive momentum. Our estimated fair value for the exchange rate is currently 1.3855—essentially at the midpoint of our projected short-term trading range for the rate (approximately 1.37/1.40).”
“The sideways trading pattern established over the last few trading sessions is still in effect and leans ‘bearish’ due to the prevailing downtrend in the exchange rate. This is reinforced by a bearish configuration of trend indicators, implying limited upside potential for the USD and continued downward pressure on the exchange rate in the coming days and weeks.”
