Lackluster Canada Consumer Price Index (CPI) to Fuel USD/CAD Strength

Trading the News: Canada Consumer Price Index (CPI)

Canada’s Consumer Price Index (CPI) may do little to curb the recent advance in USD/CAD as the headline reading is expected to slow to 2.7% from 2.8% per annum in August.

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Signs of easing price pressures may keep the Bank of Canada (BoC) on the sidelines at the next meeting on October 24 as the central bank ‘expects CPI inflation to move back towards 2 per cent in early 2019,’ and a batch of lackluster data prints may ultimately spark a bearish reaction in the Canadian dollar as it saps bets for an imminent rate-hike.

However, another unexpected uptick in the core rate of inflation may drag on USD/CAD as it puts pressure on Governor Stephen Poloz Co. to step up the pace of policy normalization, with the exchange rate at risk of exhibiting a more bearish behavior over the coming days as it continues to track the downward trend off of the 2018-high (1.3386). Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Impact that Canada CPI report has

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