CAD up marginally and a relative underperformer – Scotiabank

The Canadian Dollar (CAD) is up marginally vs. the US Dollar (USD) and continuing to underperform its G10 peers for a second consecutive session, trading with the broader trend but with moves of a smaller magnitude, Scotiabank's Chief FX Strategist Shaun Osborne notes.

RSI struggles to extend above 50

"The recent widening in yield spreads appears to have taken a pause, offering the CAD a reprieve as markets await the release of domestic data into the end of the week. Wednesday’s domestic calendar is limited to building permits for March, ahead of Thursday’s housing starts and manufacturing sales."

"The Bank of Canada’s calendar is also empty and markets are still roughly pricing a couple of 25bpt rate cuts by December. The near-term range looks to be defined by last week’s Trump/Carney meeting lows and the USD’s relief rally highs observed earlier this week."

"The latest range now looks to be bound between last week’s lows around 1.3750 and this week’s short-lived highs above 1.4000. The 200 day MA (1.4019) appears to have provided important near-term resistance as well. The RSI has struggled to extend above 50 and is now looking decidedly neutral."