TD Research discusses USD/CAD outlook and adopts a structural bearish bias over through year-end. TD official forecast for USD/CAD is 1.35-1.36 through year-end but sees risks skewed to the upside.
"The CAD's outlook has shifted considerably to the downside following a deeper slowdown to growth than initially expected. Coupled with the expectation that the BoC has completed its tightening cycle, the CAD's return profile is asymmetrically skewed to the downside," TD notes.
"Not only does the domestic economy look woeful, but external dynamics (awful BOP) should put the CAD on a path of broad and sustained depreciation. Risks are skewed to 1.35-1.40 in USDCAD this year," TD adds.