CAD stead to slightly firmer on USD - Scotiabank

The Canadian Dollar (CAD) is a marginal outperformer versus the US Dollar (USD) on the session, with spot edging just under yesterday's low in early trade here, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/CAD may test recent range limits

"The BoC's Business Outlook Survey predictably reflected Canadian firms' concerns about trade and tariffs. The uncertain course of US trade policy means businesses are curbing hiring and investment while consumers are spending less."

"The Canadian economy has been relatively resilient to the tariff challenge so far and the survey reflected marginally fewer firms anticipating a recession (28%, down from 32% in the Q1 survey) but growth prospects are sluggish at best moving ahead. Swaps continue to reflect virtually zero expectation of a BoC rate cut at the end of the month. Spot fair value has edged slightly lower to 1.3567."

"USD/CAD continues to respect recent ranges but the USD is edging towards the lower end of the recent trading band and these sorts of consolidations are sometimes preludes to a breakout and higher volatility. The USD has been comfortably capped in the upper 1.37 zone over the past week and spot may now gravitate towards minor support at 1.3650. A push under there should see USD losses extend to the 1.3570/75 area."