eFXdata reports that CIBC Research discusses CAD outlook and now expects USD/CAD to trade around 1.32 by end of Q1 before moving towards 1.34 by end of Q2.

"If fears abate and sentiment eventually improves in the next few months, oil prices should rebound and the loonie will likely be dragged along for the ride. As such, the C$ should end Q1 slightly stronger than its current level, seeing USDCAD hover around 1.32. However, that rebound will likely be short-lived, as softness in GDP growth continues and strength in the labour market wanes accordingly," CIBC notes.

"Moreover, that will likely be compounded by the repercussions of the coronavirus on global supply chains and production, and potentially current rail disruptions. That could be enough reason to see the Bank of Canada cut interest rates by 25 bps in April. Given that such a move is not currently priced into markets, that surprise would take a bite out of short term rates and send the currency weaker, with USDCAD reaching 1.34 by the end of Q2," CIBC adds.