CAD Edges Higher Amid Tariff Uncertainty, Scotiabank Cautions Gains May Be Short-Lived

CAD Edges Higher Amid Tariff Uncertainty, Scotiabank Cautions Gains May Be Short-Lived

The Canadian Dollar (CAD) posted a modest rebound in Thursday's European session, reacting to the U.S. court decision invalidating President Donald Trump's "Liberation Day" tariffs. However, as per Scotiabank's Chief FX Strategist Shaun Osborne, the CAD’s gains remain limited due to ongoing uncertainty around legal appeals and business refund logistics.

Tariff Reversal Sparks Mixed FX Reactions

Despite the favorable ruling, the CAD weakened temporarily late Wednesday, with USD/CAD climbing into the 1.3850–1.3880 zone. This move came amid broader USD strength against other majors like EUR and GBP, rather than direct CAD weakness.

Scotiabank notes that the short-term relief might not translate into sustained CAD strength due to:

• Slow appeals process from the U.S. administration
• Lack of clarity on tariff reimbursement timelines
• Persistent volatility in broader USD sentiment

Technical View: USD/CAD Faces Resistance Near 1.3900

“Despite volatility, USD/CAD spot is still trading modestly below estimated fair value at 1.3881,” says Osborne.

Key Resistance & Support:

• Resistance: 1.3900
• Support: 1.3800, followed by 1.3750
• Fair Value Estimate: 1.3881

Daily and weekly oscillators remain bearishly aligned, suggesting that even if the USD appreciates in the near term, levels near 1.3900 may represent a good selling opportunity for USD positions.

Internal Links for Tredu.com:

• USD/CAD Live Chart
• How Court Rulings Affect FX Markets
• Canadian Economic Calendar
• Scotiabank Currency Forecasts