Scotiabank sees potential for further Canadian Dollar strength after the Bank of Canada leaves policy unchanged and downplays currency impact.
The Canadian Dollar remains little changed against the US Dollar after the Bank of Canada held its benchmark rate steady and maintained a cautious outlook on growth and inflation. USD/CAD traded in a tight range near 1.3974, Scotiabank’s revised fair value estimate, the lowest in nearly a month.
The BoC removed references to potential rate hikes or cuts in its statement, noting improving but uneven growth and high but slowing inflation. Governor Tiff Macklem emphasized uncertainty during his press conference and stated the Canadian Dollar was not a major factor in policy decisions.
Scotiabank strategists see room for further CAD gains, citing bearish technicals and retracement support at 1.4083. They expect USD losses could extend toward the 38.2% retracement level, with fundamentals and charts favoring the Canadian Dollar.