Don’t miss this month’s edition of the George Davis Report, where George revisits RBC’s tariff scenarios and discusses the Bank of Canada’s response.
What you need to know:
US tariffs remain front and center for investors as uncertainty continues to build.
The TOTO environment (tariffs on/tariffs off) has caused a large amount of de-risking in response to this uncertainty.
While a more targeted tariff scenario maintains topside risks for USD/CAD, price action to-date points to a more subdued market response than initially expected.
In particular, the market has struggled to sustain breaks above the 1.4550 level throughout the tariff noise.
While the BoC provided an insurance cut at their March meeting, fiscal policy is more effective to offset the impact of a trade war and should be watched in the context of assessing future moves from the BoC.
For the trading range:
USD/CAD
Buyers
1.4100/1.4200
Sellers
1.4500/1.4600
