CAD: ‘Rates trump oil’; where to target? – BofA Merrill

Bank of America Merrill Lynch on the Canadian dollar:
Themes: rates trump oil.
We pushed up our USD-CAD forecast sizably, and now expect 1.43 at end-2017.
, Donald Trump’s election increases the risk that NAFTA will be renegotiated or scrapped. The latter is unlikely, but given 23% of Canadian GDP is comprised of trade with the US, any developments along these lines will be CAD-negative. The economic risks are not adequately priced by the market, in our view.