Scotiabank Global FX Strategy Research Hub

Scotiabank Global FX Strategy maintains a predominantly bullish outlook for the USD, driven by rising domestic yields and persistent inflationary pressures that continue to propel the DXY index toward technical resistance levels near 98.50 and 99.25. While the dollar benefits from robust Treasury performance, the broader FX landscape remains bifurcated by regional policy developments and energy price sensitivity. The CAD faces headwinds despite favorable oil prices, with the Bank of Canada signaling potential rate hikes contingent on energy-driven inflation. Conversely, the EUR struggles as it tests key support at 1.16, while the GBP remains burdened by domestic political instability under PM Starmer. Emerging market currencies such as the INR and IDR are notably vulnerable, exhibiting susceptibility to shifting global liquidity and energy price shocks as markets await critical US macroeconomic indicators.