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Canadian dollar firms versus US dollar as jobs and oil diverge

Scotiabank trimmed its USD/CAD fair value to 1.3868, citing stronger Canada employment and higher oil versus softer US labor data.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said the Canadian dollar is gaining support against the US dollar, with higher oil prices and Friday’s strong Canadian jobs report outweighing weaker US labor data.

In their framework, USD/CAD fair value edged down to 1.3868. They also flagged that near-term technicals remain bearish, with key support around 1.3899 and potential downside toward 1.3817.

The note attributed the firmer CAD tone to modestly narrower front-end US-Canada spreads, driven by the contrast in labor market outcomes. Scotiabank said a break below the 1.39 area would target a move to 1.3817, a level linked to a 61.8% retracement.

On resistance, they cited 1.3965/70 and firmer levels near 1.4000/25 for USD/CAD. FXStreet relayed the strategists’ assessment in its market commentary.

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