Scotiabank strategists Shaun Osborne and Eric Theoret report that the Canadian Dollar (CAD) remains little changed, with USD/CAD stretching its recent trading range but failing to sustain moves above the mid‑1.37s [1]. The CAD is noted as one of the better-performing major currencies during the session, and spot remains significantly overvalued relative to Scotiabank's equilibrium assessment, which is currently at 1.3402 [1]. Oil prices and terms of trade are cited as supporting factors for the CAD, while narrower spreads are also influencing market sentiment as participants consider Bank of Canada (BoC) tightening risks [1].
Last week, the BoC left its policy rate unchanged and indicated a 'wait and see' approach regarding the situation in the Gulf [1]. The technical condition of the CAD shows little change, with the USD remaining firm near the mid-1.37 area. However, gains in USD/CAD are attracting selling interest at the extremes, and Scotiabank strategists view the mid-1.37 zone as a rough resistance area, given overall market volatility. Support for USD/CAD is identified at 1.3690/00 [1].
No significant market reaction or forward-looking analyst opinions beyond the BoC's cautious stance are discussed in the article [1].
CONCLUSION
USD/CAD continues to face resistance in the mid-1.37 range, with CAD holding firm below its estimated fair value, supported by oil prices and terms of trade. The Bank of Canada maintains a cautious, 'wait and see' policy stance, and market volatility remains contained. Overall, the market impact is low, with no major shifts or reactions noted.