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The USD/CAD pair opened January trading at 1.2733. It hit a monthly low of 1.2590 on January 21 and a monthly high of 1.2881 on January 28. In February, USD/CAD is broadly expected to move in a range from 1.26-1.29, in the view of analysts at Mizuho Bank. 

Key quotes

“Some observers say the vaccine roll-out has been delayed, but if a structure is put in place soon and vaccines are steadily implemented, then domestic economic growth could recover to pre-pandemic levels by the end of 2021.” 

“With the markets swinging between risk aversion and risk appetite on the covid situation, it seems WTI prices will continue trading around $40-50/barrel. Crude oil prices will rise at times on hopes for an economic recovery and coordinated production cuts, though they will move heavily on the topside overall on concerns about flagging demand. Various countries will undergo economic recoveries in the medium-term, though, so WTI prices are unlikely to collapse, with the USD/CAD pair also set to continue trading below 1.30.” 

“The Bank of Canada will probably maintain its current pace of quantitative easing. This is another reason why the USD/CAD pair will broadly move between 1.26-1.29.”