We are pleased to bring you the latest edition of the series produced by our colleagues in RBC Capital Markets, hosted by George Davis, CMT, the award winning Chief Technical Analyst for Fixed Income and Currency Strategy. In this installment George revisits the tariff scenarios from last month and provides an update on recent developments.
The four scenarios looked at were immediate across the board tariffs of 25%, specific targeted tariffs, delayed tariffs and low to mild imposed tariffs. However, what we have seen so far is generally a tariff-on/tariff-off scenario. As it currently stands, we have 25% tariffs on many goods with specific targeted tariffs in other areas. George feels that this will lower the top-side range for USDCAD from 1.4800-1.5000 to 1.4600-1.4800, contingent on the duration of current tariffs. With risks biased toward the topside, we have seen some brief excursions to the 1.4200-1.4250 area which defines the bottom of the range.
With so many unknowns regarding the tariff situation, the expected trading range for the month will remain the same, at 1.4100 to 1.4600 with volatility expected around any tariff related headlines.