CAD Fundamentals Align: Scotiabank Sees Room for Further Downside in USD/CAD
According to Scotiabank analysts Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) has been lagging behind other G10 currencies despite a softer US Dollar tone. This is unusual given that Canada's data surprises have been improving compared to the United States.
The analysts note that while trade uncertainty and a neutral Bank of Canada are weighing on the CAD, there is fundamental support from economic data. They estimate that the fair value for USD/CAD is around 1.3930, suggesting room for further downside in the pair.
Technically, the USD/CAD pair closed bearishly last week, and short-term oscillators are tilting USD-bearish. A push under 1.3970/80 could pave the way for spot to move back to a 1.38 handle, with technicals suggesting fading moderate USD gains to the 1.41 zone.