The Canadian dollar lags despite hawkish Bank of Canada (BoC) prospects. But economists at Scotiabank do not expect the loonie to suffer significant losses.

Scope for decent CAD gains over the rest of the year

“We still rather see limited downside for the CAD versus the USD and scope for decent gains over the rest of the year on the basis of monetary policy prospects.”

“The USD’s close above the 1.2640/45 area yesterday nullifies the near-term, technically bearish outlook for funds now, we think, but weak trend momentum argues against an extended move up in the USD – for now, at least.”

“We spot support now at 1.2645/50 and resistance at 1.2725.”