Limited downside ahead for the Canadian Dollar, but the US-Canada rate gap should keep USD/CAD supported below 1.40 say analysts.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate traded around 1.3902 on Tuesday, recovering from an overnight low near 1.3846.
Scotiabank says the Canadian Dollar continues to hold up well despite volatile Fed expectations and renewed trade uncertainty.
“CAD resilience in the face of volatile Fed expectations and the latest round of trade uncertainty is impressive and reaffirms our view that there is limited downside potential in the CAD currently.”
The bank’s equilibrium estimate has edged up to 1.3920, largely because front-end US-Canada swap spreads have widened.
“Spot has spent the past week trading at or a little below our estimated fair value,” Scotiabank said.
The problem for a stronger Canadian Dollar is still the rate gap.
“Equally, however, scope for gains is curtailed by the wide rate gap.”
The Bank of Canada is expected to leave rates unchanged this week, while Friday’s jobs report is forecast by Scotiabank to show employment rising by around 15,000.
Technically, the bank remains neutral.
“The USD closed out last week on a firm note and reversed back through the August bear channel,” although daily and weekly momentum signals remain Dollar-bearish.
Scotiabank sees 1.3980/1.4000 as firm resistance, with support at 1.3845 and 1.3820/25.
That leaves USD/CAD caught in a fairly narrow tactical range: the Dollar can extend its rebound towards the upper 1.39s, but Scotiabank does not see much justification for a sustained break above 1.40 while the Canadian Dollar continues to outperform its fundamental benchmark.
Canadian Dollar Prices: This Week
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | +0.69% | +0.84% | +0.64% | +0.43% | +0.05% | +1.22% | +1.25% | |
| EUR | -0.69% | +0.15% | -0.06% | -0.26% | -0.64% | +0.52% | +0.55% | |
| GBP | -0.84% | -0.15% | -0.20% | -0.41% | -0.78% | +0.37% | +0.41% | |
| JPY | -0.63% | +0.06% | +0.20% | -0.20% | -0.58% | +0.58% | +0.61% | |
| CAD | -0.43% | +0.26% | +0.41% | +0.21% | -0.38% | +0.79% | +0.82% | |
| AUD | -0.05% | +0.64% | +0.79% | +0.58% | +0.38% | +1.17% | +1.20% | |
| NZD | -1.21% | -0.52% | -0.37% | -0.58% | -0.78% | -1.15% | +0.03% | |
| CHF | -1.24% | -0.55% | -0.40% | -0.61% | -0.81% | -1.18% | -0.03% |
The FX heat map compares how Canadian Dollar (CAD) has performed against a basket of major currencies over the past week. The largest move was against the Swiss Franc, where Canadian Dollar made its strongest advance. Data comparing prices today (01/09/2026 16:36 UTC) and daily close on 25/08/2026.
To read the table, choose the base currency from the left-hand column and then move across to the quote currency along the top row. For example, the GBP row and USD column shows the weekly percentage move in GBP/USD.
Our currency coverage draws on live market data, official economic releases and published bank research.
