"As markets have started to price in more rate hikes by the Fed this year, spreads have moved further in favour of the US and seen the C$ weaken against the greenback,notes CIBC World Markets.

In this regards, CIBC argues that even though a Fed hike next week is now fully priced, there's still scope for US yields to move a little higher over the coming months.

Meanwhile, given the potential for Canadian growth to cool a little and with the BoC Governor unlikely to change his dovish tune for a while yet, yields should be more grounded in Canada. That would see the C$ weaken and USDCAD reach 1.39 by September," CIBC projects".

Source: CIBC Economics - CIBC Capital Markets, efxnews.