CAD Set for Further Weakening as Scotiabank Predicts Downward Trend
According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) is currently marginally weaker against the US Dollar (USD), with USD/CAD reaching its highest since late July. This trend is attributed to wide yield spreads and negative Q4 seasonality, which are expected to become more pronounced in the coming weeks.
The analysts note that October and November returns for the CAD versus the USD typically turn out to be negative, with the CAD also trading softer on key crosses like EUR, GBP between through Q4. However, a bullish technical breakout from the consolidation range since May is pushing spot towards 1.4125 (76.4% Fibonacci resistance).
The current upward momentum in USD strength is supported by bullish intraday and daily trend oscillators, with initial USD support noted at 1.4050/60 ahead of 1.3990/00.