The Canadian dollar retains a soft undertone. USD/CAD has hit 1.29, however, economists at Scotiabank expect gains to be capped above this level.

Macro fundamentals are CAD-supportive

“We think the CAD has some – fairly obvious – fundamental virtues, such as tightening BoC monetary policy and very resilient growth but those factors continue to be overshadowed by external factors (equity market vol) which may keep the USD better supported for the moment.”

“We do think that the USD gains should remain capped above 1.29, the top of the range that has held spot for the past 10 months or so, however.”