Scotiabank’s Global FX Strategy team, including Shaun Osborne and Eric Theoret, notes that the Canadian Dollar is flat against the Dollar and underperforming other G10 currencies due to its differentiated risk profile. They highlight that USDCAD remains driven by relative Bank of Canada and Federal Reserve policy expectations, with key domestic events including a Deputy Governor speech, the Financial Stability Report, and Q1 GDP data later this week.

Canadian Dollar lags broader G10 gains

"The CAD is trading flat to the USD, failing to capture some of the broader themes that have propelled other G10 currencies. The CAD’s relative underperformance is understandable, and reflects its differentiated risk profile that leaves it less vulnerable to weakness in periods of risk aversion but also less prone to strength in risk appetite."

"The near-term focus for the CAD remains centered on the outlook for relative central bank policy, given the material widening in interest rate differentials that has reflected a softer repricing of the BoC’s path along with a firming in the outlook for the Fed."

"The BoC’s calendar includes Dep. Gov. Vincent’s speech scheduled for Tuesday and the Financial Stability Report set for release on Thursday. In terms of data, Q1 GDP is set for release on Friday, along with the monthly print for March. "

" Bullish—the RSI is bullish, climbing into the mid-60s as it creeps toward the overbought threshold at 70. The 200 day MA (1.3812) appears to be offering some short-term congestion with some resistance and inability to extend much beyond the trend level."

" Additional resistance appears limited ahead of 1.39. Conversely, we see little scope for support ahead of 1.375, around the 50 day MA (1.3749)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)