Economists at Scotiabank think the Canadian dollar might be able to outperform the US dollar in the next few months. They still expect the USD/CAD to tank towards 1.20 later this year.

Loonie may outperform on BoC policy and commodity gains

“Growth momentum is strong in the early part of the year and tight labour markets plus above target inflation suggest the BoC will have to lift rates aggressively in the coming months.”

“Firm commodities, even if oil prices have edged off their best levels, confer a positive terms of trade boost on the CAD.”

“Technical trends are CAD bullish and recent gains should extend towards 1.23 in the next few weeks.”

“We continue to target USD/CAD falling to 1.20 later this year.”