USD/CAD: keeping eyes on trade, Keystone, and NAFTA-related headlines - Scotiabank

Analysts at Scotiabank noted key fundamentals around the Canadian dollar.

US President Trump: if the pipelines are built in the USA, "they should use American steel"

Key Quotes:

"There are no domestic releases scheduled through the remainder of the week, leaving the near-term focus squarely centered on the broader market tone. Trade, Keystone, and NAFTA-related headlines remain a key risk for CAD."

"Yield spreads have been an important driver for CAD over the past two weeks, and markets have almost fully faded the modest BoC tightening priced into OIS. Measures of implied CAD volatility are elevated and risk reversals hint to a sizeable premium for protection against CAD weakness."