CAD slips modestly on firmer USD - Scotiabank

The Canadian Dollar (CAD) has slipped a little overnight after briefly probing sub-1.38 levels late yesterday. President Trump commented that PM Carney will visit Washington shortly and anticipated a 'great relationship' with Canada, Scotiabank's Chief FX Strategist Shaun Osborne notes.

CAD remains better supported overall

"That's quite a bit different from some of the president's other comments recently on Canada and the comments helped nudge USDCAD a little lower and bolster the CAD's broader performance. Moderate losses so far today reflect the general strength in the USD rather than any CAD-negative development and the CAD is the only G10 currency holding a gain on the USD on the week so far."

"The CAD has made up some ground on the crosses as a result. Spot is consolidating after dipping briefly under 1.38 yesterday to test congestion support at 1.3775. Marginal new cycle lows keep the grinding tone of USD weakness intact and DMI oscillators oriented bearishly for the USD."

"But the CAD's failure to hold gains on the USD today and a narrow, inside range session (at the moment) points to consolidation in the short run. USD gains may extend to the mid/upper 1.38s in the short run. Resistance is 1.3880 and 1.4000/25."