The Canadian Dollar rose 0.2% against the US Dollar but lagged the rest of the G10 complex as broad USD weakness set the tone. Markets continued to price Bank of Canada tightening into year-end despite weak labour data, shaping short-term CAD performance ahead of upcoming central bank communication.
Bank Of Canada Rate Expectations And Risk Events
Rates pricing implied 6bpts of tightening for October and, extending the move, 21bpts by December, with risk seen as elevated into three public BoC speaking engagements later this week.
USD/CAD Fair Value And Technical Indicators
A fair value estimate for USD/CAD was put at 1.4214, slightly below spot, while technical levels were described as resistance in the mid-1.42s and support at 1.41 and 1.40. Momentum indicators were characterised as bullish/neutral: the RSI had eased into the mid-60s after September’s rally pushed it towards 80, above an overbought threshold of 70.
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