Goldman Sachs Research previews the April BoC meeting on Wednesday and discusses CAD outlook.

"March inflation surprised to the downside notwithstanding the energy shock, and the latest employment report indicated stabilization but little improvement from a year ago, which our economists expect should allow the BoC to remain on hold at the April meeting," GS notes.

"Fundamentally, this leaves us less constructive CAD in the more medium term, especially with USMCA uncertainty likely to weigh on the currency ahead of the July 1 deadline. However, as long as the terms of trade implications of the energy shock remain at the fore, Canada's idiosyncratic domestic considerations should remain secondary FX drivers. In that environment, CAD should continue to outperform, consistent with its high sensitivity to oil-price shocks in our GSTOT framework and its positive correlation with the broad Dollar," GS adds.