FXStreet (Edinburgh) - BofA Merrill Lynch Global Research expects the pair to test the 1.35 handle around Q1 2016. Key Quotes “We continue to expect C$ weakness ahead as the full extent of the oil price shock has yet to be felt, which set against Fed rate hikes later this year will support USD/CAD from a policy divergence perspective”. “In the near-term, the offsetting factors of weaker oil amidst, decent Canadian growth, and declining expectations for Fed hikes, will likely leave the pair range bound”. “However, we remain comfortable that ongoing Fed hikes and a slower-than-consensus Canadian growth path will push USD/CAD higher, reaching 1.35 by end-Q1 2016”. For more information, read our latest forex news.