ScotiaBank: Yield Spreads Drive Extended CAD Slump
ScotiaBank strategists note USD/CAD continues to climb as wider US–Canada yield spreads sustain the Canadian dollar's decline, which has been nearly straight since early May.
Strategists at Scotiabank, Shaun Osborne and Eric Theoret, observe that USD/CAD is grinding higher, with the Canadian dollar experiencing a near straight-line decline since early May.
The weakness is attributed to widening yield spreads between US and Canadian bonds, which continues to weigh on CAD. The strategists highlight that the yield differential is a key driver behind the extended slump.
No specific targets or levels were provided in the note, but the persistent downward trend suggests further CAD weakness may be expected in the near term, barring a shift in yield dynamics.
Source: FXStreet Forex News