Scotiabank strategists Shaun Osborne and Eric Theoret observe the Canadian Dollar (CAD) strengthening decisively versus the Dollar, extending its typical April outperformance even as risk sentiment remains uncertain. While USD/CAD still trades above their fair value estimate, they stress that the prior overvaluation is easing and short‑term technicals point to further downside, with scope to retest early‑March lows around the 1.3520/25 area.

Loonie extends seasonal April strength

"The CAD has strengthened quite decisively over the weekend, rising against the USD with its core commodity peers despite a somewhat uncertain risk backdrop."

"CAD gains leave spot trading at its lowest since mid-March and extending the strong seasonal run in the CAD that typically emerges in April."

"Spot remains above our fair value estimate (1.3531 today) but the USD’s egregious overvaluation seen through late March and early April is easing."

"Bearish—USDCAD’s sustained run lower paused last week but that minor consolidation (in effect, a bear flag pattern) has given way to renewed USD losses and a clear push under noted support at 1.3625."

"Short-term patterns suggest the USD decline is likely to extend towards the 1.3520/25 area to retest the early March low at least."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)