In the opinion of economists at TD Securities, dips into and below 1.37 in USD/CAD should be faded and a return to a 1.40 handle is likely.

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“We see strong markers of support and dips in USD/CAD should be shallow. Dips into 1.36/37 should be strongly faded.” 

“We look for the pair to top 1.40 again in the coming weeks.”

“To get CAD to strengthen will need to see a relaxation of positive USD catalysts primarily through a Fed pivot and a series of moderation in month-on-month US core CPI. Neither is happening near-term.”