Anna 
The Bank of Canada (BoC) is set to announce its monetary policy today, refraining from releasing new economic projections. Analysts at ING have provided insights into the USD/CAD outlook ahead of the meeting.
The potential for a downside risk to the Canadian Dollar (CAD) exists as the BoC might introduce some reference to monetary easing in its announcement. However, the overall message from the central bank is expected to remain cautious.
The recent rebound in Federal Reserve rate expectations has spilled into the CAD curve, which now indicates pricing in 90 basis points of easing for the current year. With little incentive for the BoC to drive rate expectations lower at this stage, the central bank may prefer to keep this meeting low-impact on the market.
While caution prevails about an immediate rebound in CAD, the analysts suggest that a broad-based decline in the US Dollar from the second quarter could lead USD/CAD to the 1.3000 handle by year-end.
