FXStreet reports that economists at CIBC look for CAD to continue to unwind gains in the coming months.

“While the tone in the Treasuries market hints of growth concerns, these are more reflective of doubts about overseas economies. Stateside, past fiscal stimulus, pent up savings, and rising labour income should fuel a healthy consumer-led rebound in growth ahead. America’s much larger dose of fiscal stimulus and earlier reopening will see it eliminate economic slack a few quarters ahead of Canada, which is inconsistent with the market’s pricing for earlier and more aggressive rate hikes north of the border. A recalibration in those expectations will underpin a continued if modest depreciation in CAD over the rest of 2021, taking USD/CAD to 1.27 by the end of this year.”

“Gains in the price of oil lately have done little to limit CAD depreciation. Markets might be sharing our view that OPEC+ will eventually reach a deal on paring back previous production cuts. A more general softening of commodities prices in the next year as supplies catch up to the recent demand surge would also put pressure on the CAD.”