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Analysts at Goldman Sachs revised their down their outlook for USD/CAD in a three-month horizon while upped for the 12-month period.

Key quotes

“USD/CAD’s 3-month forecast is now at 1.40 vs. the earlier projection of 1.42. 

Cautious on CAD in the next quarter due to the extent of its recent rally. 

6-month forecasts for USD/CAD seen at 1.37, unchanged from the previous forecast.

12-month rate upped to 1.32 vs. the previous forecast of 1.30.

USD/CAD broke below a few key levels last week as a pro-risk rotation across markets supported higher-beta currencies. But we continue to expect any further rally to be short-lived. 

The Bank of Canada will likely ease policy in the coming months, and Canada still has domestic fragilities-housing market risks, energy sector recession-as well as other less favourable fundamentals than other economies with similar currency drivers (e.g., NOK).”