CAD holds neutral range vs USD – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) is dead flat on the session, with neither the generally softer USD tone nor the bid for its commodity cousins helping lift sentiment (AUD/CAD trading near its highest since late 2024), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD slips on crosses vs USD

"News of the Anglo American/Teck merger in an (mainly) all-share deal is unlikely to have a significant impact on the CAD at this point. Shifting BoC policy rate sentiment is unhelpful for the CAD on the face of it but, with markets moving to price in potentially more Fed easing in the coming months, the real damage is being done on the crosses, leaving the CAD the main G10 underperformer over the past month."

"US/Canada 2Y swap spreads are largely stable and holding close to recent lows. Spot remains significantly overvalued relative to our equilibrium (fair value) estimate of 1.3608. Monday’s trading range held within the wide trading range seen Friday and today’s trading range is holding within yesterday’s band. Markets have little motivation to push the CAD in either direction at this point, it would seem."

"The lack of upside follow through in spot after Friday’s sharp USD rebound from the intraday low does suggest some underlying weakness in price action amid generally mixed signals on the charts for USD/CAD. From here, more significant movement/ momentum may depend on the USD either pushing well above 1.3850/55 or below 1.3730/40."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with weekly highs in the Fed's aftermath

GBP/USD reversed early losses following the Federal Reserve decision to keep rates on hold and neared the 1.3360 level before shedding some ground. Focus shifts to Governor Kevin Warsh's speech, while the Bank of England will announce its monetary policy decision on Thursday.

EUR/USD extends rally pass 1.1450 on Fed's Warsh

EUR/USD trades at fresh weekly highs above 1.1450, following the Federal Reserve monetary policy decision to keep interest rates on hold. The statement showed policymakers remain confident in economic progress while blaming inflation on energy prices. The divided vote among officials put in doubt a September hike, leading to sharp US Dollar losses.

Gold hovers around $4,100 as Fed decision hits the USD

Gold surged following the Federal Reserve's decision to keep the benchmark interest rate unchanged at 3.50%-3.75%. Policymakers noted that inflation remains elevated and that economic activity is expanding at a solid pace despite elevated uncertainty, spurring doubts about a rate hike in September. XAU/USD peaked above $4,100, now battling to retain the level.

No soft target: Warsh vows to return inflation to 2%

The Fed left interest rates unchanged at 3.50%-3.75%, but the decision carried a distinctly hawkish edge as three officials voted for an immediate 25-basis-point increase. Chair Kevin Warsh reinforced that message, insisting there was no tolerance for a softer inflation target and warning that the Fed would not hesitate to act.

How the CLARITY Act unlocks Wall Street’s tokenization pipeline

The United States (US) Digital Asset Market Clarity Act (CLARITY Act), awaiting a full Senate floor vote, promises to unlock Wall Street’s potential to tokenize financial assets, including equities, US Treasuries, private credit, real estate and commodities at a scale that could supercharge the real-world asset (RWA) market from the current $17 billion level to $5.5 trillion by 2030, according to

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.