The Canadian Dollar (CAD) is quietly consolidating for a fourth consecutive session and extending its tight range from last Friday, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

BoC expectations in focus ahead of December 10 meeting

"There are no releases scheduled for Wednesday’s NA session, as market participants wait for Thursday’s current account figures and Friday’s highlight—the Q3 GDP release. The release will be important heading into the next and final 2025 BoC meeting scheduled for December 10, as Bloomberg consensus estimates look to a 0.5% QoQ ann. gain following a notable 1.6% contraction in Q2."

"US-Canada yield spreads are narrowing, offering the CAD some fundamental support on the back of a renewed softening in expectations for the Fed. CAD/spread correlations are somewhat weak at the moment however, suggesting a focus on broader developments and the market’s tone. Our FV estimate is currently at 1.3929, flattening out just below recent highs as it continues to trade with a sizeable discount (CAD premium) to spot."

"USD/CAD’s rally has once again stalled at resistance around 1.41 and it’s latest consolidation is providing for a modest softening in bullish momentum with a slight drift in the RSI to the upper 50s. We are neutral looking to a near-term range bound between 1.4050 and 1.4150 and note the gently rising 50 day MA at 1.3996."