CAD Strengthens Against USD Amid Trade Deal Progress

According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) is gaining strength against the US Dollar (USD) due to broad USD weakness and progress on a US-Canada trade deal.

The spot price of USD/CAD is currently trading below Scotiabank's fair value estimate of 1.3800, with short-term technicals indicating bearish conditions and further losses expected into the 1.35-1.37 range.

The tentative trade deal between the US and Canada appears to give Canada some relief on certain steel and aluminum tariffs and reduce auto tariffs, although details have yet to be finalized and domestic reception remains uncertain.