ING Research discusses USD/CAD outlook and targets the pair at 1.30 in 3-months.
"CAD has been the key laggard in the weak-USD story in G10. The pre-existing downside risks to the economic recovery in Canada (the sovereign downgrade was a case in point) paired with a high exposure to the US virus emergency/fresh lockdown measures.
In order to catch up with the gains displayed by its pro-cyclical peers, CAD will likely have to rely on an improvement in the US virus situation and signs of improved robustness in the oil market," ING notes.
"On the domestic side, the large fiscal stimulus paired with the BoC support (which should not be scaled back soon) may offer room for a more supportive data flow. We continue to see USD/CAD slowly drifting to 1.30 in 3Q/4Q," ING adds.