MUFG Research discusses CAD outlook and adopts a slightly bearish bias over the coming weeks.
"The weak growth data will add to uncertainty as well over the outcome from the snap election to be held on 20th September. Recent opinion polls have shown a pick-up in support for the Conservative party. The tightening race increases the risk that Prime Minster Trudeau’s decision to call an early election will backfire," MUFG notes.
"In these circumstances, the Canadian dollar should continue to underperform in the coming weeks although our short-valuation model suggests that a lot of bad news is already priced in at levels above 1.2500 for USD/CAD," MUFG adds.