Credit Agricole CIB Research discusses CAD outlook and sees a scope for only a limited upside from here.
"The CAD could remain supported especially if market expectations of fairly aggressive growth rebound in H221 and thus BoC QE taper materialise. That said, we also believe that the recent CAD rally has captured most of these positives with our analysis of positioning and long-term fair value suggesting that the CAD is looking a bit overbought and overvalued. We further note that some important downside for the currency lingers, which includes the policies of Joe Biden’s administration which support the environment and green energy," CACIB notes.
"We also think that the USD could regain some lost ground more broadly on the back of the improving US outlook that attracts inflows into USD-denominated assets in the next 3M-6M," CACIB adds.