The Canadian Dollar (CAD) is moderately firmer on the session as the USD slips back under 1.36 to the high 1.35s, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

CAD holds in upper 1.35 area

“Factors have turned a little less supportive for the CAD over the past week and slumping terms of trade amid weaker commodity prices are a headwind for the CAD. The CAD’s minor gains today are at odds with my fair value model which indicates an estimated equilibrium for spot at 1.3657.”

“Intraday trends hinge largely on external developments—US data outcomes, equity markets—with no domestic data on tap. US CPI came in lower than expected, so USD/CAD traded back above 1.36.”

“Short-term price signals suggest the USD’s push higher has stalled but with minor losses holding in the 1.3585 area—the 200- day MA and USD resistance earlier this week—the near-term trend higher remains intact. The USD will need to trade back under 1.3545 to alter near-term trend dynamics at this point I think. Otherwise, corrective USD gains risk extending deeper into the mid/upper 1.36s.”