VOT Research Desk
Investors will closely monitor the Canadian Consumer Price Index (CPI) data for October today. The Loonie’s potential response to the inflation report is discussed by Commerzbank economists.
Surprisingly lower US inflation statistics from the previous week had helped to sustain the pricing of USD strength, which also helped the loonie.
Similar to the US, unexpectedly weaker Canadian inflation figures are likely to temper market expectations for a rate move by the BoC, which would put pressure on the Loonie.
We anticipate an upside surprise risk. If the inflation data exceeded expectations, this would support market expectations for rate increases and temporarily lower USDCAD.
