Trading the News: Canada Consumer Price Index (CPI) Another slowdown in Canada’s Consumer Price Index (CPI) may tame the sharp depreciation in USD/CAD as it encourages the Bank of Canada (BoC) to adopt a more gradually path in normalizing monetary policy. Why Is This Event Important: Signs of softer-than-expected inflation may push the BoC to the sidelines as ‘very strong growth of the first quarter is expected ...
The Bank of Canada seemed to provide fuel for USD/CAD bulls with the statement that core inflation measures “continue to point to material excess capacity in the economy.” The statement combined with USD strength to stretch the 2-year differentials to their widest in 3-months. Betting against a pair that is showing the steepest yield differential in a quarter is a bet against momentum, which can be painful when wrong. Sticking to the tenet ...
We’ve seen Canadian Dollar strength that is backed by much of the Commodity run and subsequent USD weakness since the Fed hiked in December. However, February has been a sideways affair. I’m awaiting a price breakdown and close below the support levels of 1.3083/76 to validate the view. However, we do see a lot of support at 1.3000 as the price continues to hold up above 1.3000 or find bids. Regarding resistance, the price has had a difficult ...
Trading the News: Canada Retail Sales A 0.6% rebound in Canada Retail Sales may spark a bullish reaction in the loonie and lead to a near-term pullback in USD/CAD should the data print highlight an improved outlook for growth and inflation. What’s Expected: Why Is This Event Important: Even though the Bank of Canada (BoC) keeps the door open to further embark on its easing-cycle, a marked pickup ...
Trading the News: Canada Consumer Price Index (CPI) Another uptick in Canada’s Consumer Price Index (CPI) along with stickiness in the core rate of inflation may foster a larger pullback in USD/CAD as the Bank of Canada (BoC) ‘expects total CPI inflation to be close to 2 percent from early 2017 onwards.’ What’s Expected: Why Is This Event Important: Even though the BoC ‘actively’ discussed more ...
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