Danske Research sees a scope for USD/CAD to extend its gains into year-end.
"The upward pressure on USD/CAD has resumed over the last month. Looking ahead, we continue to pencil in more topside driven by both broad based USD strength, shaky global asset markets, tighter global financial conditions and a Bank of Canada delivering less tightening than the Fed. A much improved global growth outlook and/or more dovish central banks mark the biggest downside risk factor to our forecast," Danske notes.
"On the other hand, a sharp global recession could send USD/CAD considerably higher than in our base case," Danske adds.