CAD Due for Rebound Against USD, Scotiabank Strategists Say
The Canadian Dollar is trading in a tight range against the US Dollar, according to Scotiabank strategists Shaun Osborne and Eric Theoret. They note that USD/CAD has been holding steady near 1.38, with no domestic data influencing the currency's value.
The CAD is being driven by external factors and technicals, rather than its own fundamental indicators. Scotiabank's fair value model suggests a stronger CAD at around 1.3700, but spot prices have deviated from this equilibrium, showing a significant valuation gap of over a month.
This disparity may limit the potential for further CAD drift without new catalysts, according to Osborne and Theoret. They also point out that trend momentum remains USD-bearish across short-, medium-, and long-term studies, indicating that moderate USD gains will likely draw selling interest.