CAD resists deeper USD advance through mid-1.44s - Scotiabank

Right, so border tariffs are back on for next Tuesday. But maybe only for a short period? So much tariff-mongering, so little clarity, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

CAD little changed on the day

"The president is certainly keeping Canadian and Mexican feet to the fire on the border issue but it remains to be seen exactly what emerges next week. The risk of highly punitive tariffs has increased but the FX reaction has been relatively subdued--certainly compared to the early February moves." 

"The cost to the Canadian economy will be significant but the impact on the US is non-negligible--via higher prices and negative repercussions for the US auto sector, for example. Stocks closed softly yesterday, with the S&P 500 ending below its 100-day MA for the first time since August. If it does come to 25% tariffs it may be that they are in place for a relatively short period--until the president can point to concrete signs that his stance is having an effect." 

"After the quick USD advance to the low 1.44 region yesterday, spot has consolidated through the overnight session. Ranges have been narrow but, at the margin, minor CAD gains in early Asian trade may signal scope for some, minor CAD recovery intraday. The USD enjoys bullish trend momentum on the intraday and daily charts which should limit the CAD's ability to recover significant ground at this point. Support is 1.4350/75. Resistance is 1.4465/75."