Scotiabank strategists see the Canadian dollar stabilizing after recent USD strength and spread deterioration.
The Canadian dollar (CAD) remains nearly unchanged against the US dollar (USD), trading near 1.4158, a level Scotiabank identifies as fair value. Strategists note that stretched USD positioning has contributed to recent consolidation, reducing downside risks for the CAD.
Earlier pressure on the CAD stemmed from widening yield spreads, but these are expected to stabilize. The currency’s current range reflects a pause in volatility after a period of USD strength, with no immediate catalysts for a breakout.
Market reaction has been muted, as traders await further signals on monetary policy or economic data that could shift the USD/CAD pair.