Canadian Dollar Trims Gains, Trades Near Fair Value Against USD

The Canadian dollar is trading in line with the broader US dollar tone, with USD/CAD dipping overnight before reversing to trade close to unchanged.

Comments from US officials suggested that limited long-term tariff damage would not significantly impact US-Canada trade relations, and negotiations were framed as capable of progressing towards a wider agreement by year-end.

Scotiabank's fair value estimate for USD/CAD remains close to the spot rate at 1.4013 against a market level around 1.40.

From a technical perspective, the pair is neutral with little alteration in momentum, pivoting around the 40-day moving average at 1.4074 and staying below resistance at 1.4125 and above initial support at 1.4060.