The Canadian Dollar (CAD) has shed a little ground on the day but is trading more or less unchanged on the session, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/CAD is stabilizing around the upper 1.35 zone

"US/Canada trade talks are progressing—as far as we know— towards an agreement later this month so, presumably, Canada will not be one of the countries getting a letter from President Trump. Finance Minister Champagne said he believes Canada is in position to work out a better deal than other countries because of the scale of the US/Canada trade relationship."

"Weaker risk sentiment is a headwind for the CAD, however, and is reflected in the slightly higher equilibrium estimate for USDCAD (1.3560) that our model reflects this morning. Canada releases (final) June S&P Global Services and the Composite PMIs at 9.30ET."

"USD/CAD is stabilizing around the upper 1.35 zone. The broader downtrend in spot remains intact and trend momentum remains USD-bearish across a range timeframes. Those factors should mean limited upside potential in the USD (low/mid-1.36s) in the short run. Support remains 1.3540//50."