Analysts at the National Bank of Canada see the USD/CAD moving in the 1.36-1.39 range during the next months, before the Loonie makes a comeback. Their year-end target is 1.32 for the pair. 

Key Quotes: 

“The Canadian dollar remains relatively weak against the greenback, as it continues to hover near its cyclical high. While many investors fear a tightening of global credit conditions, some believe that Canadian banks could face a very difficult environment due to their exposure to residential real estate in a much higher interest rate environment. Combined with weakening commodity prices, the short-term outlook does not support a stronger loonie.”

“USD/CAD should remain in the 1.36-1.39 range in the first half of 2023, before making a comeback in the second half of the year when more central banks finally end their tightening cycle.”