Barclays Research maintains a neutral bias on CAD over the medium-term.

"We remain neutral on the CAD for the foreseeable future. Ongoing trade frictions with the US continue to weigh on the economy, per the string of recent data releases. There has so far been limited progress in the USMCA renegotiation process and ever-present escalation risks ahead of a potential deal. The first mandatory six-year joint review of the treaty is on July 1, which is the main short-term marker on the timeline," Barclays notes.

"Somewhat encouragingly, surveyed firms signaled they were beginning to adjust to trade frictions in the Q1 Business Outlook survey (albeit this was conducted for the most part before the Middle East escalation). In addition, persistently high energy prices should afford some support too, particularly versus importers. Overall, however, there is limited scope for the BoC to embark on an FX-supportive hiking cycle for the time being, which was also the message of last week's Summary of Deliberations from the BoC's last meeting," Barclays adds.