The CAD has participated in the broader rally against the USD this week but gains have come grudgingly. Economists at Scotiabank analyze Loonie's outlook.

CAD set to gain a little at least relative to the USD coming months

The CAD is perhaps catching some of the spillover from the USD, with investors believing that the Fed and BoC will follow similar policy cycles. That may be true in a broad sense but there are other factors that should help the CAD gain a little at least relative to the USD coming months. 

If the Fed rate cycle is peaking, which looks very likely, risk assets should improve somewhat, providing the CAD with some additional support. A softer USD should also be supportive for commodity prices. An array of factors already suggests the CAD should be somewhat stronger.