EBC Markets Briefing | Canadian dollar steady on potential US-Canada trade deal

The Canadian dollar was flat on Tuesday after oil extended gains amid reports of fresh Houthi strikes on Saudi Arabia and attacks by Iran on ships in the Gulf.

The Japanese yen's recent rally has forced investors to look for alternative funding sources for carry trades, with the Chinese yuan and Canadian dollar emerging as top contenders.

Trump voiced optimism about settling the trade dispute with Canada, indicating that an agreement could be reached "fairly soon". That came after the two countries imposed fresh tariffs on each other.

The escalating trade dispute between the US and Canada has even threatened to sever cross-border supply chains that are critical to key industries like automotive manufacturing.

Canada's annual inflation rate held steady at 3% in August, matching the figure recorded in July. While energy price increases remained high, they showed little movement over the month.

Some economists say the odds of a December rate hike by the BOC have increased in the wake of the report. Still sluggish domestic growth and a weak housing market argue for caution.

EBC Financial Group analyst says the loonie exhibited a classic top bottom reversal pattern, with the 200 SMA shifting into a resistance level around 1.3840 per dollar.

Asset Recap

As of market close on 14 September, among EBC major products, ServiceNow shares led gains, bucking weakness in chipmakers as investors rotated toward names seen as less exposed to a potential slowdown in AI development.

Lam Research stock plunged as a broad and intensifying semiconductor equipment selloff sweeps across the sector. The most persistent pressure point is Lam's significant revenue concentration in China.

Speculators have flipped to a net long position on the Japanese yen for the first time since February. The currency has surged this month on expectations ​for an ​accelerated schedule of rate ​hikes by the BOJ.

A portfolio diagnostic is critical to managing tail risk. EBC Turbo leverages a proprietary scoring model to run a six-dimensional analytics scan within 5 seconds, mapping your risk-return dynamics and decoding your trading DNA.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.