CAD holds range as weak risk appetite counters spread narrowing – Scotiabank

The Canadian Dollar (CAD) is little changed on the session at writing but spot did pop briefly higher in overnight trade before edging back to the lower end of the trading range seen over the past few sessions, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Spot is trading a little lower on the session

"Weak risk appetite is a potential headwind for the CAD in the absence of any clearer drivers. But narrower US/Canada spreads as US yields sink should act as a buffer for the CAD to some extent. The CAD already look’s somewhat mispriced relative to the 15bps or so narrowing in short-term US/Canada swap spreads seen over the past 2-3 weeks."

"Spot is trading a little lower on the session but the charts suggest the USD retains a firm underlying tone and support in the low 1.4000s is helping sustain the recent uptrend and give the short-term trading pattern the look of a consolidation more than anything else at this point. Intraday support is 1.4020 ahead of 1.3970/75. Resistance is 1.4065/75."