eFXdata reports that Danske Research adopts a bearish bias on USD/CAD over the medium-term. 

"We fundamentally like to consider USD/CAD as ‘USD/NOK but with a lower beta to global risk sentiment and oil prices’. This is due to the CAD’s close connection to the USD (Canada-US trade link) and Canada’s lower dependence on oil. A way to illustrate the close connection between USD/CAD and USD/NOK is to look at short-dated correlations, which currently run at close to 80%..," Danske notes. 

"Looking ahead, we expect the global reflation theme to remain in the driver’s seat. We forecast USD/CAD at 1.30 in 1M (previously 1.34), 1.27 in 3M (was 1.23), 1.27 in 6M (was 1.32) and 1.28 in 12M (was 1.32)," Danske adds.