As we know, oil is a key export for the Canadian economy and one of the main driver of the country's economic growth. Thereby, a significant source of Canadian national income depends on the condition of the energy markets. However, I expect further growth of the oil prices, which will provide appreciation of Canadian Dollar. In addition I think that US and China trade war will make negative impact on USD, so I bet on CAD strengthening vs USD.
I think, that strong Canadian data including employment and GDP growth will in any way push Bank of Canada to upgrade its growth forecasts and to hike rate in spite of its announcements. Lately BoC postpones its decision, due to focusing on NAFTA-related risks and uncertainty about inflation. Anyway, I think we will see rate hike in the nearest future, so I bet on further strengthening of CAD against USD.
Canada has the permanent current account deficit (which is partly due to lost market share in the U.S.) and therefore the continued dependence on foreign capital. The type of capital that Canada is attracting is short-term in nature, for instance portfolio inflows, which is very sensitive to negative turn in foreign investor sentiment. Therefore I have negative long-term outlook for CAD.