CAD slips through 1.41 – Scotiabank | FXStreet

CAD Slips Below 1.41 – Scotiabank Analysis

The Canadian Dollar (CAD) continues its downward trend this morning, underperforming against the US Dollar (USD) with a 0.2% decline, according to Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret.

Federal Budget Highlights

The Federal budget focuses on increased spending in housing, defence, infrastructure, and productivity to foster investment and stimulate growth. However, the fiscal deficit is projected to widen significantly, reaching CAD 78 billion, a sharp increase from the previous government's forecast of CAD 42 billion in December.

Political Context

The minority government requires support to pass the budget legislation, but another election appears unlikely at this stage.

Foreign Exchange Market Impact

The CAD's performance is unimpressive, with spot gains moving well beyond one standard deviation from the fair value estimate of 1.3917.

"Spot dollar gains through the 1.4080 resistance point (now initial support) have been flagged as a risk for a while now, and the USD’s advance to the 1.41 level this morning suggests further appreciation toward the 1.4160 zone (the 50% retracement of the February to June USD decline at 1.4167)."

About FXStreet Insights Team

The FXStreet Insights Team is composed of journalists who curate expert market observations, featuring perspectives from both commercial and external analysts.

Summary: The CAD’s decline highlights market concerns over widened fiscal deficits and related budget spending, suggesting further USD gains ahead amid political steadiness.

more

FXStreet FXStreet — 2025-11-05

More News