Bank of America Global Research discusses CAD outlook and sees BoC pn hold for the rest of the year and USD/CAD modestly lower by year-end.

"Both USD-CAD and DXY are largely the same now compared to when military action in the Middle East began. We have kept our general FX views the same for G10 and specifically for CAD as well. We remain circumspect of market optimism around the cessation of military action. Consistent with our general near-term USD-positive outlook, we are near-term negative on CAD, especially in the face of BOC inaction," BofA notes.

"Our Commodities team still expects oil prices to remain elevated for the rest of the year, and in the current environment, we remain near-term concerned around the global growth impact from higher energy prices, feeding worries around risk that should be modestly CAD negative, and keeping our upside near-term views around USD-CAD in place. But over the medium-term, we see USD overvalued, and our Economics team expects two Fed cuts by the end of the year in contrast to the BOC on hold, which should help USD-CAD modestly lower by the end of the year," BofA adds.