The Canadian Dollar (CAD) is underperforming against the US Dollar (USD) as renewed US-Canada trade talks commence, with USD/CAD trading in the mid-1.38s range according to Scotiabank strategists Shaun Osborne and Eric Theoret [1]. The CAD is noted to be soft and is underperforming all other G10 currencies into Tuesday’s North American session [1]. Domestic Canadian data releases have been limited, but Bank of Canada’s Rogers provided constructive commentary, urging markets to look beyond the weak Q1 GDP release and focus on stronger indications of growth in April [1].
These trade talks are the first since last week’s New York speech by Prime Minister Carney, who adopted a more conciliatory tone, which has contributed to some stabilization in US-Canada spreads and offered modest support to the CAD [1]. Scotiabank’s fair value estimate for USD/CAD has risen to 1.3741, reflecting the current market dynamics [1]. Technical analysis points to bullish momentum for USD/CAD, with the pair trading in a range between 1.3800 and 1.3900, and the Relative Strength Index (RSI) climbing into the mid-60s, indicating strengthening momentum [1].
Additionally, there is a notable increase in the premium for protection against USD/CAD upside, signaling market concerns about further CAD weakness [1]. Resistance is seen as limited ahead of the psychologically important 1.3900 level, suggesting the potential for further USD gains in the near term [1].
No specific analyst forecasts or forward-looking statements beyond the technical outlook and the impact of ongoing trade talks are provided in the source [1].
CONCLUSION
The Canadian Dollar remains soft and is underperforming its G10 peers as USD/CAD trades near recent highs, driven by limited domestic data and ongoing US-Canada trade talks. Technical indicators suggest bullish momentum for USD/CAD, with resistance seen near 1.3900. Market sentiment remains cautious, with a rising premium for protection against further CAD weakness.