Scotiabank analysts cite diverging central bank expectations and upcoming Canadian data for the loonie’s underperformance against the USD.
The Canadian Dollar remains flat against the US Dollar, lagging other G10 currencies as relative monetary policy expectations dominate. USDCAD is anchored near 1.38, reflecting a softer Bank of Canada outlook versus a firmer Federal Reserve stance, widening interest rate differentials.
Recent underperformance stems from the CAD’s differentiated risk profile, which limits gains during risk-on periods. Key domestic events this week include a Deputy Governor speech, the Financial Stability Report, and Q1 GDP data, which may shift policy expectations further.
Technical indicators suggest bullish momentum, with the RSI climbing toward overbought levels and the 200-day moving average at 1.3812 acting as support.