Scotiabank Sees Canadian Dollar Gaining Strength Against USD

The Canadian dollar has been gaining strength against its US counterpart, according to Scotiabank analysts. The bank's FX strategy team notes that a break below key technical support opens the door for further gains toward the 1.35-1.37 range.

This momentum is driven by firming crude oil prices and a softer US dollar, with USD/CAD trading near 1.36 as of this week. Scotiabank highlights that improving risk sentiment and resilient Canadian economic data are also contributing to the loonie's appeal.

The 1.35-1.37 area represents a significant demand zone that previously acted as resistance in late 2024. A sustained move below 1.36 would confirm bullish momentum for the Canadian dollar, while a rebound above 1.38 would negate the near-term outlook.