Viraj Patel, FX Strategist at ING explained, in respect of the BoC coming up this week, with the policy rate likely to remain on hold, front-loaded CAD weakness is even more crucial for a central bank deeply reliant on export-led growth. Key Quotes: "With the policy rate likely to remain on hold, front-loaded CAD weakness is even more crucial for a central bank deeply reliant on export-led growth. The Jan MPR revealed that net exports is expected to account for a sizable chunk (1.4ppts) of 2016 GDP growth. The 10% rally in the trade-weighted CAD since the 20 Jan meeting will be a concern for policymakers, although part of the strength can be justified by a recovery in oil prices (and risk sentiment). Indeed, our short-term model indicates that USD/CAD is currently trading close its estimated fair value (1.3200/50). The repricing at the short-end of the CAD curve has also played a role, with the 2Y yield rising by 27bp since bottoming in mid-Jan. A more cautious BoC, one that follows the Fed in citing concerns of financial conditions, will see local rates (and the CAD) nudge lower." For more information, read our latest forex news.