The Canadian Dollar (CAD) is marginally lower on the session, in line with its commodity peers as risk appetite remains soft, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Trade talks remain stalled

"Narrower short-term US/Canada spreads are having little pull on the CAD as external factors (risk) continue to drive spot moves. PM Carney is in Washington next week for a World Cup-related event and but there is no indication of whether he will get any time with President Trump."

"Reports indicate that trade officials on both sides are starting to think that stalled discussions may get rolled into the broader review of CUSMA next year, which will unhelpfully prolong the uncertainty for Canadian businesses. Our fair value estimate for the CAD is little changed at 1.3945 this morning, leaving the USD trading a bit more than one standard deviation above estimated equilibrium."

"Grinding USD gains appear set to challenge resistance at 1.4140 (early Nov high) and perhaps 1.4167 (50% retracement of the USD’s Feb/Jun side). Minor support sits at 1.4085 now, with major support at 1.3970."