CAD flat and outperforming on crosses – Scotiabank

FXStreetOct 8, 2025 11:56 AM

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The Canadian Dollar (CAD) is trading flat from Tuesday’s close and extending its recent consolidation around a cluster of key technical levels, a relative performer against all of the G10 currencies in an environment of broad-based US Dollar (USD) strength, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD is being buoyed by trade hopes

"The Trump/Carney meeting appears to be buoying the CAD, in terms of sentiment, offering positive signals as Canada and the US work toward a trade deal with hopes of easing sectoral tariffs. Canada’s fiscal situation remains a concern following Monday’s announcement, with a focus on the budget scheduled for release on November 4th."

"BoC risk is also elevated, as we look to Thursday’s speech from SDG Rogers and consider the possibility of a pushback to the market’s dovish pricing. The outlook for relative central bank policy was a key driver of weakness through much of Q3 however we see scope for possible strength in the event of a shift in policymakers’ cautiously dovish tone. Our FV estimate for USD/CAD is currently at 1.3734."

"The RSI has stalled in the low 60s, implying only modestly bullish momentum. USD/CAD’s recent gains have faltered around a cluster of key technical levels, most importantly the 61.8% retracement of the September 2024/February 2025 rally at 1.3944. The 200 day MA (1.3980) has offered additional resistance, just below the psychologically important 1.40 level. We look to a near-term range bound between 1.3920 support and 1.3980 resistance."

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