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Canadian dollar steadies, showing modest weekly strength vs US dollar
Scotiabank says much of the bad news is already priced into CAD, and improving Canadian data plus stabilizing front-end spreads support a more constructive near-term outlook for USD/CAD.
FXStreet, citing Scotiabank strategists Shaun Osborne and Eric Theoret, said the Canadian dollar (CAD) was flat on Thursday but modestly firmer versus the US dollar (USD) over the course of the week, making CAD a mild outperformer.
The bank argued that risks to CAD have eased as much negative information has already been priced in, leaving limited room for further USD/CAD losses.
Scotiabank pointed to stabilizing USD/CAD front-end risk reversals and improving Canadian data as factors that could support CAD in the near term, while noting a technical backdrop that remains broadly unchanged.
The strategists also said the USD is extremely overbought and that the 1.4250 to 1.4300 area should continue to act as firm resistance against a USD advance.