Canadian Dollar: Sideways against USD as valuation stretched – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank strategists Shaun Osborne and Eric Theoret note USD/CAD is steady around 1.3695, with the Canadian Dollar (CAD) seen as cheap versus a fair value estimate near 1.3510. They highlight slightly wider front-end spreads in favour of the US Dollar (USD) but argues stretched USD valuation should limit further gains. Short-term technicals show resistance near 1.3720 and support around 1.3640/45 and 1.3550/75.

Canadian Dollar seen as undervalued

"The CAD is little changed against the USD as spot continues to hold within recent ranges. A bounce in risk appetite constitutes a minor plus for the CAD on the session with little else to focus on."

"Factors driving the CAD have drifted a little over the past week—front-end spreads have widened a little in the USD’s favour—but the CAD remains “cheap” relative to our fair value assessment (1.3510 today) still. The USD’s somewhat stretched valuation should constrain scope for gains, all else equal."

"BoC DG Alexopoulos will speak at the Ottawa Economics Association (OEA) and the Canadian Association for Business Economics (CABE) 2026 Spring Policy Conference on AI adoption, productivity and economic potential in Canada. Prepared comments hit the wires at 11.05ET. There is a moderated Q&A following her comments. "

"Neutral/bearish—Little change in spot means no real change in the technical backdrop. USD/CAD remains capped by key resistance at 1.3710/20 (a marginal infraction through the 20 point was firmly rejected yesterday)."

"A clear break above 1.3720 is needed to see USD gains extend to 1.3750/00. Support is 1.3640/45 and 1.3550/75. "

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

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.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.