CAD consolidates after jobs data - Scotiabank

The Canadian Dollar (CAD) is trading marginally higher on the US Dollar (USD) on the session, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Carney to announce defence boost

"Friday's jobs data were not as weak as expected but the trend in the labour market data remains soft, reflecting pressure on the domestic economy from tariff uncertainty. Some support for the economy may come from government plans to boost spending, however. The Globe reports that PM Carney will announce a boost in defence spending which will reach NATO's 2%/GDP target in the current fiscal year (from outlays of around 1.4%) and rise beyond that in the years ahead."

"Given recent reports suggesting that PM Carney is quietly negotiating with Pres. Trump on a trade and security deal, this may be evidence of progress--a plus for the CAD. Late week price action in USD/CAD suggested some moderation in the broader and deeply entrenched bear trend. USD losses are steadying around weekly trend support at 1.3645/50."

"However, with trend dynamics still bearish for the USD across the intraday, daily and weekly studies, scope for USD gains is limited. USD/CAD losses are holding a decisive break below the final Fibonacci retracement support ahead of a full retracement to 1.3420, last September's low. USD gains should see better selling pressure on a retest of the mid-1.37 area. The 40-day MA at 1.3840 currently should offer solid resistance above there in the (less likely) event of a deeper USD squeeze."