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USD/CAD is retesting the mid-February high at 1.3590. Economists at Scotiabank analyze the pair’s outlook.
Loonie likely to remain soft for now
The Canadian Dollar is expected to maintain a subdued stance in the near term, lacking significant fundamental drivers for a strengthening CAD, particularly in light of the recent widening in US/Canada interest rate differentials.
The USD has witnessed notable gains in the current session, revitalizing short-term trend strength indicators in favor of the USD. However, the overall trend in spot rates during February has been relatively flat. To see further gains materialize, the USD will need to overcome the resistance around 1.3585/1.3590, paving the way for potential advances into the low to mid-1.3600s.
Support is 1.3540/1.3550.
