Canadian Dollar: Gains hinge on 1.3970 against US Dollar – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is effectively flat versus the US Dollar (USD) but modestly outperforming other majors, trading close to their fair value estimate around 1.40. With CAD-specific news limited, USD/CAD remains driven by external factors and stabilized US/Canada spreads. Technicals stay USD-bearish, with downside focus on a break below 1.3970/80 and fading rallies toward 1.41.

CAD trades near fair value versus Dollar

"The CAD is effectively flat against the USD and outperforming most of the major currencies modestly on the day as a result."

"CAD-specific news remains scant and the trend in funds remains largely contingent on external developments. US/Canada spreads have stabilized and broader risk appetite remains positive—while the tech/AI cycle holds."

"The trend in relative US/Canada data surprises has turned a little more positive for the CAD in recent weeks. Trade concerns remain a background niggle ahead of the August 19 deadline for President Trump’s latest tariff salvo."

"Our fair value estimate for spot sits just above 1.40 this morning (1.4006), suggesting that the CAD is more or less right where it should be. "

"Bearish—There is little change in the CAD’s technical position. Broader chart pointers continue to lean USD-bearish after the negative technical close on the week through last Friday."

"The CAD still needs to secure a break under 1.3970/80 (former high/retracement support) to drive the next phase of gains, however. Technicals suggest fading moderate USD gains to the 1.41 zone."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

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