USD/CAD: Canadian inflation may have a very limited impact on the Loonie – ING

content provided with permission by FXStreet


Inflation data for February will be published in Canada today. But the CPI report is unlikely to impact significantly the Loonie, economists at ING report.

Inflation a secondary factor

“Today’s inflation may have a very limited impact on CAD given the BoC’s recent stance.”

“CAD should continue to lag other pro-cyclicals on any rebound in risk sentiment unless there is a clear stabilisation in market sentiment on the US banking sector.” 

“At the same time, the BoC’s dovishness is likely lowering the medium-term attractiveness of CAD: we continue to expect a drop below 1.30 in USD/CAD by the second half of this year, but that should primarily be a consequence of USD weakness rather than idiosyncratic CAD strength.”

See – Canadian CPI Preview: Forecasts from five major banks, inflation growth to decelerate