Canadian dollar futures were supported by optimistic housing start numbers, which can indicate broader economic strength. Forward-looking traders are pricing moderate CAD appreciation if domestic economic data remain firm. Despite its dominant industry position and history of profit growth, the elevated P/E suggests the market is looking for continued strong performance, or at least sees CP as a safer, higher-quality pick among rails. However, when compared to its estimated fair price-to-earnings ratio of 19.6x, the current level may be ahead of fundamentals. This gap could narrow if earnings growth accelerates or the sector rerates lower. that translates to fewer Canadian dollars received once the U.S. dollars are converted back into the producer’s local currency. Canadian dollar futures showed resilience, clawing back 0.2% after morning weakness. Market strategists emphasize the need to watch spread movements against AUD and NZD, which have shown divergent patterns in the commodity-linked FX space.
