On March 4, former U.S. President Trump announced tariffs on Canada, causing CAD/JPY to fall to 102.20. Later, reports that auto tariffs might be delayed for a month helped it rise above 104.
Global stock market declines then led to more yen buying, pushing CAD/JPY back to around mid 102 range. However, products following the USMCA trade agreement were given an exemption until April 2, helping CAD/JPY rise again above 104.
Canada’s job report showed lower-than-expected unemployment but an increase in jobs, supporting the Canadian dollar. A rebound in U.S. stocks also helped CAD/JPY end above 103.
This week, CAD/JPY may continue to be unstable due to Trump’s changing statements, the Bank of Canada (BOC) policy meeting, and the upcoming election.
The BOC is expected to cut interest rates for the seventh time in a row, and markets expect more cuts by the end of the year. However, if the BOC signals a slower pace of future rate cuts, CAD/JPY could rise.
Former Bank of Canada and Bank of England Governor Carney has been nominated as the next candidate to replace Prime Minister Trudeau, and is expected to take a bullish stance against President Trump.
With most negative news already known, traders may look for reasons to buy back the Canadian dollar this week.
This week’s expected CAD/JPY range: 105.00 – 101.66
Note: The above analysis does not guarantee profit. Please make your own decisions when trading.