FXStreet reports that strength in the Canadian dollar was part of the view of analysts at Credit Suisse set for Q2 and remains so in Q3. The USD/CAD target is set at the 1.2150 level.

“We raise our USD/CAD target from 1.1920 to 1.2150. CAD remains a pro-cyclical play on US growth and energy prices: we expect a more domestic-driven story in Q3.”

“While the data validates the supportive US momentum story, covid vaccinations are proceeding at the fastest pace in G10. With restrictions still in place across Canada, re-opening prospects point to a possible Q3 acceleration in domestic demand.” 

“Rates markets are pricing in a slightly earlier rate hike (Q2 ‘22) compared to BoC guidance (H2 ‘22), but overall expectations seem far from stretched. This should keep the 2-year interest rate differential vs the US firmly in favour of CAD.”