{"id":49866,"date":"2026-03-25T21:51:10","date_gmt":"2026-03-25T21:51:10","guid":{"rendered":"https:\/\/www.vtmarkets.com\/uncategorized\/scotiabanks-strategists-say-cad-weakens-as-usd-strength-lifts-usd-cad-beyond-its-estimated-fair-value\/"},"modified":"2026-03-25T21:51:10","modified_gmt":"2026-03-25T21:51:10","slug":"scotiabanks-strategists-say-cad-weakens-as-usd-strength-lifts-usd-cad-beyond-its-estimated-fair-value","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/live-updates\/scotiabanks-strategists-say-cad-weakens-as-usd-strength-lifts-usd-cad-beyond-its-estimated-fair-value\/","title":{"rendered":"Scotiabank\u2019s strategists say CAD weakens as USD strength lifts USD\/CAD beyond its estimated fair value"},"content":{"rendered":"USD\/CAD has been moving higher as US Dollar momentum lifts the pair and the Canadian Dollar drifts lower. Scotiabank\u2019s fair value estimate has edged up due to lower oil prices and weaker terms of trade.\n\nThe bank describes a valuation gap that is well above one standard deviation. It says there has been little new information, and the Canadian Dollar may not get near-term relief.\n\n

Valuation Gap And Key Technical Levels<\/h3>\nThe pair\u2019s move above the mid-1.37 area increases the risk of an overshoot towards 1.3800\/10. It is uncertain whether the low 1.38 area will limit further gains.\n\nResistance is clustered around the 200-day moving average at 1.3804 and the 50-week moving average at 1.3803. Further resistance is noted at 1.3930.\n\nSupport is placed at 1.3650\/75. The article states it was produced with the help of an AI tool and reviewed by an editor.\n\nWe are recalling the situation back in 2025 when the USD\/CAD was pushing above 1.37, creating a significant valuation gap. At that time, we identified the 1.38 zone as a major resistance area with overshoot potential. This perspective was driven by weak oil prices and unfavorable terms of trade for Canada.\n\n

Options Positioning And Risk Management<\/h3>\nAs anticipated, the pair did test the high 1.38s in late 2025 before sellers stepped in, confirming that zone as a strong long-term ceiling. Now, with WTI crude prices averaging over $80 in the first quarter of 2026, a significant improvement from last year, the fundamental picture has shifted. Canada\u2019s terms of trade have improved accordingly, narrowing that previous valuation gap.\n\nGiven the current momentum, derivative traders should consider selling into any strength toward the 1.3650-1.3675 area, which was the old support level back in 2025 and now acts as resistance. With Canada\u2019s latest inflation figures coming in firm at 2.9%, the Bank of Canada may maintain a hawkish stance, limiting significant upside for the pair. Using call credit spreads with a short strike above 1.37 could be an effective way to capitalize on a range-bound to lower outlook.\n\nWe should remain cautious, as strong US economic data could still spark temporary USD rallies. Therefore, buying cheap, out-of-the-money put options on USD\/CAD could serve as a good hedge against any unexpected downturn in oil prices or a surprisingly dovish turn from the Bank of Canada. The key is to view rallies as opportunities to position for a stronger CAD, rather than a change in the primary trend.\n\nCreate your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b>\n

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Start trading now – Click here<\/a> to create your real VT Markets account <\/strong> <\/p>\n","protected":false},"excerpt":{"rendered":"

USD\/CAD climbs on stronger US Dollar; weaker CAD, lower oil push fair value higher and resistance.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-49866","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t