USD/CAD: Goldman Sachs expects drop to 1.25 within 3 months

In an analysis note published on Tuesday, the Goldman Sachs bank believes that the USD/CAD pair will fall to 1.25 within 3 months, which is equal to a drop of nearly 600 pips compared to current prices.

"Despite recent disappointments in Canadian retail performance and the CPI, the underlying macroeconomic backdrop remains encouraging.

And even if a 25-basis point increase is already largely embedded in prices, it is also possible for the BoC to revise its economic forecasts in an upward direction."