The FOMC decision failed to shake the CAD out of its broad range. But the CAD has shaken off yesterday’s late session wobble to regain the mid-1.35s this morning amid broader USD weakness and firmer stocks and commodities, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

CAD gains a cent from overnight low on the USD

“Spreads, which have been widening in the USD’s favour, should perhaps steady at least. Note USD/CAD is trading a little below estimated fair value (1.3583) this morning. BoC External Deputy Governor Nicolas Vincent speaks to the Sherbrooke Chamber of Commerce from around 08:15ET. His speech is titled ‘Monetary policy decision-making: behind the scenes’ but I doubt the comments will tell us much more than we already know.”

“USD/CAD pushed higher through to the mid1.36s in early Asian trade before sliding a cent over the balance of the session. Minor gains from the European session low around 1.3540 are not yet strong enough to suggest that a base for the USD is developing.”

“Trend momentum signals are leaning USD-bearish on the short-term chart and a low close for the USD on the day (which would confirm a bearish outside reversal) would suggest building downside risks for spot and a potential retest of the late August low at 1.3440.”