Danske Research discusses USD/CAD outlook and targets the pair at 1.34 in 1-month and 1.37 in 6-months.

"Bank of Canada has clearly expressed that they now believe to have reached the peak in policy rates amid signs of a slowing labour market and concerns as to the level of private debt in the economy. Our call is in line with these signals, which in turn means that relative rates look set to be a positive for the cross in the months ahead," Danske notes.

"Looking ahead, we still have a higher USD/CAD as our base case and although we expect energy prices to remain elevated we believe the broad USD effect is set to dominate – especially on a 3-6M horizon," Danske adds.