USD/CAD: Fair value estimate stands at 1.4068 – Scotiabank
Scotiabank’s analysts highlight a softer Canadian Dollar, trading defensively with G10 peers. Wider US–Canada yield spreads remain a headwind as Bank of Canada (BoC) expectations firm, with October priced for 14 bps and December for 37 bps of tightening.
Scotiabank's analysts estimate the fair value of USD/CAD at 1.4068, citing a weaker Canadian Dollar and widening US-Canada yield spreads. The Bank of Canada's expectations of tightening interest rates, with 14 basis points expected in October and 37 in December, are a significant headwind for the CAD. The latest economic data, including July's flat monthly GDP and decelerating annual growth, further support this outlook.
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