The Canadian Dollar (CAD) is trading little changed on the day. Along with a minor gain for the MXN and the generally firmer USD, there is a mild bid for North American FX across markets, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Oil rebound supports slight lift in Canadian Dollar

"Oil prices are up a solid 1%+ and sentiment appears more bullish as tension in Iran grow and President Trump threatens to tariff countries trading with Tehran. The CAD’s recent performance has been dampened by the soft tone of energy prices and subdued terms of trade."

"It’s probably no coincidence that our fair value estimate for the CAD (1.3824) has strengthened for the first time in a week or so this morning as oil prices firm up. Spot formed an inside range session on the daily chart yesterday, suggesting the USD rebound that developed over the turn of the year has stalled."

"The net loss for the USD on Monday tilts technical risks mildly bearish at least. Intraday price action so far adds to the impression of a top/reversal developing above the 1.39 point where we now expect firm resistance. USD losses through 1.3860/70 may prompt a drop back to the low 1.38s over the next day or two."