The Canadian Dollar (CAD) weakened following the BoC announcement. Economists at ING analyze Loonie’s outlook.

USD/CAD set to move below 1.3000 in the second half of the year

It is key to remember that CAD has been tracking quite closely the dynamics in US data, and that may remain the case until a broader USD decline emerges and favours pro-cyclical currencies such as CAD. 

We target a move in USD/CAD below 1.3000 in the second half of the year but still see CAD as less attractive than other pro-cyclical currencies like NOK and AUD this year – also due to our expectations for large rate cuts in Canada.