It’s swings and roundabouts for the Canadian Dollar (CAD) at present as markets weigh the risk of tariffs and react to each and every headline that drops on the matter, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

CAD is trading softer on the day

“The CAD has slipped on the session but is actually the most resilient of the G10 currencies against the USD. Spot is deviating a bit more significantly from our fair value estimate (1.4238) again but more pivoting around 1.44 seems likely for now as investors await the Bank of Canada and Fed policy meeting decisions tomorrow.”

“A 1/4 point cut from the Bank is widely expected and factored in while the Fed is expected to sit on its hands. Both central banks may signal that rate settings will remain on hold for now as policymakers monitor developments. That will sustain US/Canada spreads at onerous levels for the CAD for some, preventing a significant recovery regardless of the tariff situation.”

“The CAD is a little weaker today but the CAD bullish technical developments noted previously—the USD-bearish weekly close through late Friday, the break under trend support (now resistance at 1.4445) and the broadening top developing on the daily chart—remain intact. Support is 1.4350/55. Look for more range trading for now.”