TD Research discusses its USD/CAD strategy into this week's BoC meeting on Wednesday.
"We think there is more room for a deeper correction. For one thing, the market is still pricing in the 55bp worth of hikes this year in spite of the lost economic momentum and risks around NAFTA. We think the market is still "long" the data but note the delta of this factor has already turned entirely negative. We continue to expect only one more hike from the Bank this year, with the next one to come in the summer.
We remain buyers on dips into the BoC and look for a fresh break of the 1.30 level soon," TD advises.