CAD slides back to mid-1.37s amid broader dollar rebound – Scotiabank

The Canadian Dollar (CAD) is weaker, down nearly 0.5% on the session and retesting yesterday’s intraday low versus the USD in generally featureless trade, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Canadian Dollar weakens as USD rebounds from sell-off

"Risk appetite has strengthened in overnight markets and spreads are maintaining the narrowing trend that has taken the USD’s yield advantage at the 2Y sector of the curve back to its lowest since December (near 110bps), which is helping our fair value estimate for spot hold near 1.36 (1.3592 currently). The USD’s drift away from its equilibrium estimate persists, however, on the back of its broader recovery from yesterday’s hefty sell-off."

"A snappy rebound from yesterday’s USD sell-off has extended USD gains to a marginal new, short-term high just above 1.3750. USD momentum is not particularly strong but nor is the USD rebound especially stretched. Spot is pressuring 50-day MA resistance (1.3738), which held on a daily close basis yesterday but a clearer push above 1.3750 will suggest a quick retest of the June high at 1.38. Support is 1.3650/75."