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The Canadian dollar is closely tracking risk sentiment, according to analysts from TD Securities. They see the USD/CAD pair testing the 1.34 level again. 

Key Quotes: 

“CAD has closely tracked risk sentiment since the start of COVID. It’s usually a high-beta currency. Yet much of CAD’s focus has fallen to global drivers, especially as it relates to shifts in the broad USD.”

“Even though risk appetite has turned less supportive, USDCAD has still marched lower. That’s Unsustainable. As a result of other forces at work, USDCAD likely lurches higher in the weeks ahead, especially if we see a broader USD correction.”

“Positioning and other tactical drivers could insulate CAD against crosses like NZD, AUD, and GBP, where our dashboard looks more extreme and idiosyncratic factors, likeBrexit, are back in play.”