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Canadian dollar lags as US-Canada trade talks collapse

Scotiabank expects short term USD strength that could push USD/CAD toward the mid to upper 1.39s as tariff responses and aid plans add uncertainty for Canadian businesses.

Reported · Written up by our desk · Major Pairs

FXStreet notes that Scotiabank strategists Shaun Osborne and Eric Theoret flagged the Canadian dollar as the main underperformer among G10 currencies after US and Canada trade talks collapsed.

They said Ottawa has pledged to respond to tariffs and provide domestic aid, a combination they believe could raise uncertainty for Canadian businesses and weigh on prospects for a broader agreement soon.

While the wider USD/CAD downtrend remains intact, Scotiabank sees scope for short term USD gains toward the mid to upper 1.39s, with a potential trigger coming if USD/CAD pushes through the mid 1.38s.

The strategists added that the initial CAD market reaction was limited, suggesting the situation is still fluid, but they expect uncertainty to keep the CAD soft versus the US dollar and in cross currency moves.

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