The US Dollar to Canadian Dollar (USD/CAD) exchange rate has continued its steady climb this month, trading near 1.4000 after rising from 1.3798 at the start of June.
The pair is now testing levels last seen in late 2025, with the Canadian Dollar struggling to benefit from swings in oil prices.
At the time of writing, USD/CAD was trading at 1.3996, up around 1.4% month-to-date and close to this month’s high of 1.4024.
According to Scotiabank, the Canadian Dollar has failed to gain much support from higher crude oil prices and has recently come under renewed pressure as energy markets reacted to hopes of progress towards a peace deal involving Iran.
“The CAD did not get much lift from higher oil prices but does appear to be getting weighed down by the drop in energy prices around Iran peace hopes.”
Scotiabank believes improving risk sentiment could offer some support for the Loonie, but argues that the currency remains heavily dependent on broader US Dollar trends.
“The CAD is still not master of its own destiny and a broadly lower USD is really what the CAD is looking for to improve.”
The bank notes that stronger equity markets and a softer Dollar backdrop should help limit upside pressure on USD/CAD.
“At the very least, the bounce in stocks and somewhat softer USD tone should strengthen the ceiling on funds around the 1.40 point.”
From a technical perspective, Scotiabank maintains a neutral stance. While the US Dollar retains a positive bias, momentum indicators suggest the rally is becoming stretched.
“The USD remains overbought but trend momentum is still bullish.”
Scotiabank sees resistance emerging in the 1.40–1.41 range, which capped gains during the fourth quarter of last year, while initial support is located around 1.3900.
The bank believes caution is still warranted, but signals that upside momentum may be beginning to fade after USD/CA$’s strong June advance.
