The Canadian dollar has fallen for ten straight days ahead of today’s CPI report. Yesterday was a holiday in Canada so Toronto is just filing in and we get some top-tier data with Canadian CPI (and the Empire Fed) due at the bottom of the hour.
The inflation report highlights one of the reasons that the loonie has been weak: It’s already at 2.0% y/y and forecast to fall to 1.8%, leaving plenty of room for the Bank of Canada to cut rates. The next meeting is Oct 23 and the market is nearly split on the possibility of a 50 bps cut.
Today’s CPI report will go some ways towards settling that, particularly the core measures. In any case, this is an incredible chart as USD/CAD has risen every day since October 1.
USDCAD daily
For more on what’s expected, see the economic calendar.