The Canadian dollar is trading in a narrow range near fair value against the US dollar, according to Scotiabank currency strategists. The stable USD/CAD pair reflects balanced market conditions and a lack of strong directional catalysts. In currency markets, fair value is an estimate based on fundamentals such as interest-rate differentials, commodity prices, inflation and trade balances, indicating that an exchange rate is neither overvalued nor undervalued. The loonie's current stability has been supported by relatively steady oil prices, a key influence on Canada's commodity-linked currency, and similar monetary-policy stances from the US Federal Reserve and the Bank of Canada. A rangebound market can reduce exchange-rate uncertainty for cross-border businesses and investors exposed to Canadian assets, making financial planning more predictable. The equilibrium could nevertheless change with shifts in risk sentiment, inflation data, central-bank communications, economic releases or geopolitical events. Businesses can use hedging tools such as forward contracts or options to manage currency risk and should consult a financial adviser about strategies suited to their needs.