The Canadian Dollar saw a notable rally in the third quarter, with the USD/CAD exchange rate hovering around 1.38, close to its fundamental equilibrium, according to FX Street citing Scotiabank. This suggests the currency is trading near its fair value against the US Dollar.
FX Street also reported, referencing the National Bank of Canada, that the strong performance of the Canadian Dollar during Q3 was supported by positive economic data and rising prices for oil and gold. These factors helped push the USD/CAD rate briefly below the 1.38 mark.
However, the National Bank of Canada warned that new US tariffs and ongoing trade uncertainties present downside risks to Canadian economic growth. For Japanese investors, monitoring the CAD's movements is important given the intertwined nature of commodity markets and Japan's exposure to global trade dynamics.