The Canadian Dollar (CAD) edged lower after US President Donald Trump announced the termination of all trade negotiations with Canada, Scotiabank FX strategists Shaun Osborne and Eric Theoret report.
The move followed a US television ad by Ontario’s government critical of tariffs, though CAD losses remained contained within recent ranges and were modest compared with other major currencies.
BoC may lean on market pricing for 25bps cut
August Retail Sales in Canada rebounded 1% as expected, but preliminary September data showed another dip in consumer spending, reinforcing expectations of sluggish growth.
Analysts suggest that the combination of weak domestic momentum and trade tensions could encourage Bank of Canada policymakers to align with market pricing for a 25-basis-point rate cut at next week’s policy decision.
Technical outlook: USD/CAD ranges hold amid seasonal CAD weakness
USD/CAD remains supported in the upper 1.39s, with recent trading ranges holding steady. Despite intraday USD strength, the charts do not yet indicate a clear push higher.
Seasonal trends through year-end typically weigh on CAD, which could support modest upside in USD/CAD. Key resistance levels are seen at 1.4035 and 1.4080, with further upside toward 1.4150–1.4160 if momentum builds.
