CAD edges fractionally higher - Scotiabank

The Canadian Dollar (CAD) continues to lean quite hard on the 1.40 zone but, even with the USD slipping broadly on the day, cannot secure a clear push under the figure zone, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD can't secure a clear push under 1.40 area

"Spot is all but unchanged on the session yet the CAD should be able to leverage further softness in the USD to push more decisively below the 1.40 area. The BoC's Summary of deliberations for the October 29th policy decision reinforced messaging from policymakers that there was little more they could do to help the economy adjust to the structural challenges brought about by US trade policy."

"Rates are likely 'close to the limit' of their ability to support the economy, policymakers agreed, a view which was clearly reflected in Governor Macklem's post-meeting remarks."

"Spot is just about holding on to support in the 1.3990/00 zone but, with five successive days of net USD losses on the daily chart and last week's rejection of the mid-1.41 area still prominent on the weekly chart, there are some potentially CAD-positive technical trends developing. A sustained push under 1.3990/00 support should see the USD slip back to the 1.3900/50 zone at least in the short run."