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Canadian dollar firms as USD softens and trade deal progress weighs

USD/CAD is below Scotiabank’s fair value estimate near 1.3800, with the bank pointing to potential downside toward 1.35 to 1.37.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said USD/CAD is under pressure as broad US dollar weakness coincides with tentative progress on a US-Canada trade deal.

They noted spot is trading below their fair value estimate around 1.3800, while short-term technicals are bearish, with resistance lowered as losses are expected to extend into the 1.35 to 1.37 zone.

Scotiabank also pointed to modest intraday CAD gains, saying the currency is up about 0.3% and is the second-best performer among major currencies.

The strategists added that details of any concessions are not finalized and the domestic reception to the government’s approach remains to be seen, even as they continue to look for deeper USD losses.

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