The Canadian Dollar (CAD) has remained relatively stable in today’s trading session, with little movement as markets continue to hold the currency in a narrow range above 1.40. Scotiabank’s Chief FX Strategist, Shaun Osborne, notes that this trend is likely to persist into next week, ahead of the Bank of Canada’s policy decision on December 11.
Swaps markets are pricing in a slight chance of an aggressive rate cut (41 basis points), which has kept the CAD under a defensive tone. Meanwhile, Canadian Prime Minister Justin Trudeau has pledged more spending in his upcoming fall economic update to support economic growth. However, no timeline has been provided for when the update will be delivered.
Osborne observes that spot ranges for the CAD are tightening, with a weakening trend momentum suggesting continued sideways movement in the short term. The currency is expected to trade between support at 1.4030 and resistance at 1.4090/00 in the near future.
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