Bank of America Global Research discusses its USD/CAD outlook and targets.

"Although we recently made a number of forecast revisions in G10 FX, for 2026, we kept our CAD profile unchanged.. We keep our USDCAD forecast at 1.38 for first half of the year, and see the pair modestly drop back to 1.36 to end the year as economic conditions in Canada improve and trade uncertainty finally fades  In general, such a profile also fits our general broader expectations for near-term USD-upside, followed by a return to modest USD depreciation in H2 and into 2027," BofA notes.

"Forecast: expect more backloaded USD/CAD depreciation in 2026 No changes. We keep our forecast at 1.38 for first half of the year and see the pair falling again to 1.36 for 2026 year-end. In muted form, such a path for CAD follows our general USD outlook, where we expect some further near-term strength, but softening in H2 and over the longer term in 2027," BofA adds.