Canadian Dollar steadies as US shutdown freezes economic data

💡 DMK Insight

CAD’s dip against the USD is a direct response to the uncertainty surrounding the US government shutdown. With economic data releases on hold, traders are left in a fog, making it harder to gauge the health of the US economy. This situation often leads to a flight to safety, favoring the USD, which could further pressure CAD. If the shutdown drags on, we might see increased volatility in CAD pairs, especially if oil prices fluctuate, given Canada’s heavy reliance on oil exports. Traders should keep an eye on the 1.35 level for USD/CAD; a break above could signal further weakness for CAD. On the flip side, if the shutdown resolves quickly, we could see a rebound in CAD as economic data resumes. But for now, the immediate sentiment leans bearish for CAD, and those holding long positions might want to reconsider their strategies until clarity returns.