The Canadian Dollar (CAD) is little changed against the generally firmer US Dollar (USD), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD faces resistance in upper 1.38s

"Firm Canadian jobs data helped provide the CAD with a lift late last year as the broadly better than expected data forced the markets to reconsider potential for additional Bank of Canada rate cuts (while markets continue to consider easing risks from the Fed)."

"Narrower short-term spreads provided the essential drive behind the CAD’s late year rise against the USD and, despite the drop in the CAD over the turn of the year, remain little changed."

"The late Dec/early Jan rally in funds has steadied over the past 24 hours as the USD bumps up against the cluster of resistance points in the upper 1.38s (50% retracement of the Nov/Dec USD decline, a major low from late Oct and the 100-week MA). Trend momentum favours the USD remaining firm, however, and risks seeing the USD rebound extend to the 1.3950/00 range. SUD support remains 1.3810/20."

(This story was corrected on January 9 at 15:15 GMT to remove references to expectations about the Canadian employment data for December, which was already released at the time of the publication of this article.)