"Canada benefits from the improved growth outlook in the US, even if uncertainties as to the implications of the Trump victory for US-Canadian trade relations have risen markedly. The Bank of Canada left rates unchanged at the December meeting and our base case remains unchanged rates over the next 12M, even if the probability of a H2 17 hike has increased.

With the outlook of near-term USD strength and the risk of a setback in oil prices, we still see risks skewed towards a higher USD/CAD over the coming months.

We forecast the cross at 1.35 in 1M (previously1.36), 1.34 in 3M (unchanged), 1.30 in 6M (unchanged) and 1.28 in 12M (unchanged)".

Copyright © 2016 Danske, eFXnews™