Inflation Beat, USD/CAD Persevering with to Slide

Canadian Dollar Evaluation & Information

  • Canadian CPI Prints Above Expectations
  • USD/CAD Development Stays Your Buddy, Fade Topside
  • Quick Positioning Suggests Ache Commerce is Larger CAD

Headline Canadian CPI printed above expectations on each the month-to-month and yearly charges at 0.2% (vs 0.1%) and 4.4% (vs 4.3%) respectively. In the meantime, the BoC’s most well-liked measure of inflation (common of median, trim and customary CPI) rose to 2.67% from 2.56%. Rising value pressures had additionally been echoed by companies in the latest BoC Enterprise Outlook Survey, whereas a powerful labour market report is prone to see a extra optimistic BoC forecast at subsequent week’s assembly with one other QE taper anticipated to go forward as deliberate.

Market Response: General, a comparatively muted response within the Canadian Greenback with the present unwind of USD longs largely dictating the state of play in G10 FX. What’s extra, the pattern stays your pal with USD/CAD because it the pair makes its descent in the direction of the 1.20 deal with. To date bounce backs have been restricted to the 5DMA, nevertheless, ought to we see a extra sizeable carry, topside resistance at 1.2420 ought to cap. Fading rallies I believe is the technique heading into the Financial institution of Canada assembly as oil and equities stay agency.

USD/CAD Chart: Every day Time Body

Canadian Dollar Forecast: Inflation Beat, USD/CAD Continuing to Slide

Supply: Refinitiv

Positioning: Moreover, with internet shorts within the Canadian Greenback hovering round YTD highs, this is able to recommend that the ache commerce is increased CAD and thus, any pullbacks within the Loonie could also be used to unwind brief positions, reinforcing the view that CAD might proceed to seek out dip demand.

USD/CAD Positioning

Canadian Dollar Forecast: Inflation Beat, USD/CAD Continuing to Slide

Supply: Refinitiv, CFTC

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