CAD remains undervalued – Scotiabank

The Canadian Dollar (CAD) is modestly firmer on the session but still well within recent trading ranges, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Carney calls April 28th election

"The USD remains strongly—around two standard deviations—overvalued versus our equilibrium estimate (1.4143), with tariff uncertainty likely accounting for much of the USD’s strength. The USD still looks to be overpriced for the tariff regime that is in place currently and what might yet emerge, especially considering the news that the White House may scale back the scope of the April 2 tariff announcement."

"The CAD is unlikely to pick up much ground until tariff risks are clearer. The widely expected election call was made at the weekend, with PM Carney going to the country on April 28th."

"Technical signals are leaning modestly USD-bearish after the USD’s failure at 1.44 last Thursday. A clear rejection at the figure leaves spot pushing below 1.4340/50 support this morning which may see USD losses extend to test trend support at 1.4300/10. A clear break below here should see USD losses to the mid-1.42s. Resistance is (firm) at 1.4400/10 and 1.4520/30."