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Canadian dollar holds steady as USD/CAD seen capped near 1.3736

Scotiabank’s strategists lowered their fair value estimate for USD/CAD to 1.3736 and point to resistance in the low to mid 1.39s, with downside interest toward 1.3500 to 1.3550.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said the Canadian dollar (CAD) is likely to stay relatively steady against the US dollar despite renewed US Canada trade tensions and targeted import bans.

They noted that improving CAD fundamentals have supported the currency, while they trimmed their fair value estimate for spot USD/CAD to about 1.3736. The strategists also said renewed USD-bearish technical dynamics are helping limit further upside for the pair.

In their view, USD should face firm resistance in the low to mid 1.39 area, with the broader USD downtrend from the mid-year peak looking set to resume. They highlighted potential support around 1.3715 to 1.3735 before any decline back toward the 1.3500 to 1.3550 region.

Scotiabank added that some US measures, including dairy, alcohol, and motorcycle goods bans, have had little immediate impact on the CAD, with those latest steps due to come into force on September 29.

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