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Scotiabank sees Canadian dollar poised to recover versus US dollar

Scotiabank puts USD/CAD equilibrium near 1.3930 and says a break below 1.3970/80 could reopen the door for the pair to target the low-1.38 area.

Reported · Written up by our desk · Major Pairs

FXStreet highlights Scotiabank analysts Shaun Osborne and Eric Theoret’s view that the Canadian dollar has lagged other G10 peers, even as the US dollar tone has softened and Canadian data surprises have improved versus the United States.

They point to stronger CAD fundamentals and a “neutral” stance from the Bank of Canada as key factors, alongside trade uncertainty that has constrained the currency’s ability to gain traction against USD.

On valuation and technicals, Scotiabank estimates USD/CAD fair value around 1.3930 and argues the spot rate has room to move lower given daily oscillators that are tilting USD-bearish.

The analysts add that a push under 1.3970/80, described as prior support, should set up potential movement back toward the 1.38 handle, while they expect fading moderate USD gains toward the 1.41 zone.

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