Canadian Dollar: Sideways against USD as valuation stretched – Scotiabank

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.)