CAD slips through 1.41 – Scotiabank

CAD Slips Through 1.41 – Scotiabank

The Canadian Dollar (CAD) continues to weaken 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 Impact

The recent federal budget outlines major spending increases in housing, defence, infrastructure, and productivity to drive investment and economic growth. However, the fiscal deficit outlook has worsened substantially.

"The red ink spillage is significant, though with the current FY deficit forecast to rise to CAD78bn (well above the CAD42bn projected under the previous government back in December)."

Political Outlook and Currency Reaction

The minority government will require support to pass the budget, but another election appears unlikely. Despite this, the CAD remains weak, with spot exchange rate gains moving well beyond our 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 progress through to the 1.41 handle this morning points to further appreciation to the 1.4160 area (50% retracement of the Feb/Jun decline in the USD at 1.4167)."

Market Insights

The FXStreet Insights Team curates market analysis from leading experts, combining both commercial notes and insights from internal and external analysts.

Summary: The Canadian Dollar’s decline reflects challenges from a rising budget deficit and political dynamics, with technical levels suggesting further USD strength near 1.4160.

FXStreet — 2025-11-05