Forex
CAD Under Pressure Near 1.40 as USD Tone Firms
The Canadian Dollar (CAD) continues to face pressure near its 1.40 level against the US Dollar, according to Scotiabank strategists Shaun Osborne and Eric Theoret.
This downward trend is largely driven by a firm tone in the USD, as well as wider US-Canada front-end spreads.
The spot CAD remains somewhat overvalued relative to Scotiabank's fair value estimate of 1.3910.
Broad market conditions are also contributing to the CAD's decline, with a softer risk appetite and lower crude oil prices.
A potential boost for the CAD could come from upcoming remarks by Bank of Canada Governor Macklem, who may reiterate concerns about intensifying upside risks to inflation.