CAD lacks motivation to push through 1.40 – Scotiabank

The Canadian Dollar (CAD) is little changed on the session as spot remains anchored around the 1.40 point, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD holds range

"The CAD still looks relatively 'cheap' around current levels from a longer-term point of view and from the perspective of our shorter-term fair value estimate. The model indicates fair value at 1.3871 this morning, leaving the USD trading about one standard deviation above equilibrium still."

"The CAD’s lack of appeal reflects sluggish growth and ongoing trade uncertainty. A significant improvement in the CAD undertone seems unlikely absent more compelling fundamental drivers. BoC DG Vincent speaks on productivity at 12.45ET. Prepared comments hit the wires at 12.30ET and there will be an audience Q&A."

"Spot remains range-bound around the 1.40 point. The relatively large fall in the USD yesterday pressured support in the upper 1.39 range but the CAD was unable to sustain those gains. USDCAD losses from yesterday’s intraday high should at least reinforce short-term resistance in the 1.4060/80 zone. Support has shifted a little lower to 1.3975/80."