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Canadian dollar seen near fair value versus US dollar near 1.4115
Scotiabank expects the CAD’s improvement to be limited unless near term rate spreads versus the US narrow later in 2026, with USD/CAD support seen at 1.4060.
Scotiabank strategists Shaun Osborne and Eric Theoret said USD/CAD is trading close to fair value around 1.4115, with the Canadian dollar largely constrained by wide short term interest rate differentials versus the US dollar.
They said softer oil is a mild headwind, but the more important factor is the rate spread, and a Fed hold could allow the CAD to firm slightly. However, they do not expect meaningful improvement until rate differentials narrow later in 2026.
Technically, the note says the CAD is little changed against the generally stronger USD and that spot is testing resistance at 1.4115 to 1.4125, followed by 1.4160 and a key resistance at 1.4250. Support is seen at 1.4060.