CAD Trading Near Fair Value as USD Gains Stall

According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) is trading close to its fundamental equilibrium. This comes as USD/CAD hovers near fair value around 1.38.

The strategists note that recent US Dollar gains have stalled, reinforcing a broader downtrend from mid-year peaks. Technical resistance in the low/mid 1.39s and support near 1.37 guide near-term trading expectations.

Notably, President Trump has taken aim at Bombardier jets and the CAD in recent days, suggesting a boycott or ban on Bombardier jets and complaining about the “unacceptable” CAD “imbalance” with the US.

Despite this, the CAD is shrugging off heightened trade tensions. The strategists estimate that the CAD is currently trading close to its fundamental equilibrium, with spot dipping briefly below 1.38 in early Asian trade before rebounding slightly.