Scotiabank Warns USD/CAD Overvaluation Fuels Gains to 1.3810

USD/CAD has ground higher into the mid-1.37s as Scotiabank flags the Canadian dollar trading well above its 1.3554 fair-value estimate, opening the door to further upside toward 1.3810/20. The move follows a 2% pullback from April’s 1.395 highs amid softer Canadian jobs data and a Bank of Canada survey pushing the next rate hike out to March 2027. While Rabobank earlier projected a climb to 1.40-1.41 over three-to-six months, recent minutes show policymakers prepared for only small adjustments and willing to look through the energy-driven inflation spike. Headline CPI is now seen jumping to 3.1% in April, yet core measures are expected to stay contained, keeping the BoC on hold.