CAD softer amid weak risk appetite

Weak risk appetite is causing the Canadian Dollar (CAD) to soften this morning, although its losses are more moderate compared to other high beta and commodity currencies, according to Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret.

Bank of Canada and Fiscal Policy

BoC Governor Macklem’s recent comments reinforced the message from last week’s policy decision. Monetary policy remains somewhat stimulative but is limited in its ability to counteract trade-related headwinds.

"Monetary policy is somewhat 'stimulative' but there were limits on what the BoC can do to offset the headwinds from trade turmoil."

Finance Minister Champagne is set to present a “no surprises” Federal budget just after 4 pm, with core elements already known.

Increased spending on defense, housing, and infrastructure projects
Spending cuts responding to economic challenges from US trade policy

Trade and Legal Developments

The US Supreme Court is scheduled to hear arguments regarding the legality of President Trump’s use of emergency powers for imposing tariffs on Wednesday. A decision is not expected before early next year (February).

Canadian trade data release is delayed due to the US government shutdown, as trade balances rely on reciprocal import data from both countries.

Technical Levels for USDCAD

Spot gains are approaching the 1.4080 high from mid-October, which is the main resistance point before USD gains could extend to the mid-1.41 range and retracement resistance at 1.4160.

Intraday support is seen around 1.4040–1.4050. Losses in USDCAD would need to extend below 1 to confirm weakness.

"Spot gains are closing in on the 1.4080 high from mid-October that stands as the only obvious resistance point."

Summary: The Canadian Dollar faces mild pressure amid cautious risk sentiment and trade uncertainties, while muted policy moves and upcoming fiscal plans influence market dynamics.

FXStreet — 2025-11-04