CAD Steady Amid US-Canada Trade Tensions, Scotiabank Sees Further Gains
According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) has remained steady in the face of renewed US-Canada trade tensions and targeted import bans. They attribute this resilience to improving CAD fundamentals and a lower fair value estimate for USD/CAD near 1.3736.
The strategists note that the CAD has shown no significant response to President Trump's weekend comments on Canada's 'dollar imbalance', nor has it been affected by the recent news of banned Canadian dairy, alcohol, and motorcycle goods. This suggests that the White House's measures have had little impact on the CAD so far.
Osborne and Theoret also point out that underlying technical dynamics are bearish for the USD/CAD pair, with resistance in the low/mid-1.39 zone and a downtrend from the mid-year peak resuming. This suggests that moderate USD gains may draw selling interest, leading to a decline toward the 1.3500/50 region.