The market wasn’t fully priced for a hike, so there’s some residual support that will probably come through in the move's wake. The next was the soft US inflation number. For CAD, it is likely to catch the tailwinds of the broader USD weakness, which will probably invite a move to 1.30 in the near future. 

That said, keep in mind that BoC will maintain adherence to data dependency like other central banks. In turn, they are unlikely to commit to another hike, leaving the door open for this to be the last. With that in mind, we also think that CAD can lose some of its appeal on the crosses, given our outlook of slowing US growth in H2, which is likely to have secondary impacts.

The deeper USD downturn we expect in H2 will certainly benefit CAD, but it won’t be the best way to play a deeper downturn in the USD.