Bank of America Global Research discusses CAD outlook and adopts a buy-on-dips bias over the coming weeks.
"CAD's outperformance is consistent with our directional views, albeit considerably larger in magnitude than we expected. Not only did CAD outperform in 1Q while the broader US dollar was rising (one of three currencies marginally stronger against USD over the period), but also managed to keep pace with peers over Apr-May when the broader USD retreated," BofA notes.
"Looking forward, we expect CAD to continue to trade with commodity proxy status, which presents both upside and downside risks. For now, we remain a CAD buyer on dips this year but see present levels as overdone,"BofA adds.