CAD CPI Preview: what to expect of USD/CAD

Statistics Canada will publish inflation figures gauged by the CPI later in the NA session. Market consensus sees headline consumer prices to have risen at an annualized 1.5% during October, up from September’s 1.3% gain.

Core prices measured by the Bank of Canada are expected to have gained 1.8% on a year to October, matching the previous month’s readings.

According to ‘Rates, FX and Commodities Strategy’ at TD Securities, “Though the Bank sees the risks around their recently-revised inflation outlook as roughly balanced, we remain of the view that downside risks linger”.

Regarding FX, USD/CAD remains well supported at recent lows in the 1.3400 neighbourhood, reinforced by the 20-day sma, currently at 1.3417. On the opposite direction, the 1.3575/90 band, where coincide the Fibo retracement of the 2016 drop and Monday’s top, emerges as the transitory hurdle.

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