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What is the outlook for USD/CAD into year-end?

Bank of America Global Research discusses USD/CAD outlook and maintains a long exposure into year-end.

We recently went long USDCAD, spot 1.3160, via 3-month 1.34/1.38 call spread,  in the context of potentially higher market volatility, softer oil and rising USD. CAD has recovered from March weakness on the back of surging global risk appetite and higher oil, which softened Canada’s terms-of-trade shock, but CAD remains a highly cyclical currency,” BofA notes.

USD/CAD seasonals are bullish. External financing risks look set to increase after the debt capital flow surge in 1H, underpinned by twin deficits in the current account and net direct investment. Oil is now under pressure.  Technicals are supportive,” BofA adds.