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Canadian dollar eyes CPI

Started by PocketOption, Feb 17, 2022, 02:08 pm

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Canadian dollar eyes CPI

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Canada’s CPI report looms


Inflation remains the bane of the economy for many industrialized nations, and Canada has not been immune to this trend. CPI took a step backwards in December, with a reading of -0.1% m/m. However, inflation is expected to have jumped in January, with a consensus of a strong gain of 0.6%. A reading within expectations would indicate that high inflation remains alive and well and will put pressure on the Bank of Canada to take aggressive action in order to curb inflation.


BoC Governor Tiff Macklem has said that more rate hikes are coming in order to lower inflation to the central bank’s 2% target, and there are high expectations that the BoC will match the Federal Reserve in March and raise rates by 25 basis points. Macklem is still singing a tune that inflation is transitory and will ease in the second half of the year. Still, with inflation galloping at a 30-year high and consumers feeling the pinch of higher prices, the BoC may have to raise rates several times before inflation is brought down.


The world remains focused on the crisis at the e/ border, with fears that a n invasion could be imminent. Moscow has apparently moved some troops away from the border but President Biden said that this has not been verified and warned that an invasion remains “distinctly possible”. Biden has warned  that it would face severe consequences if it invades, and the ball is squarely in Moscow’s court as to what happens next. The US dollar has taken a pause from recent gains, but investors aren’t about to snap up riskier assets until  lowers the tensions.


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USD/CAD Technical



  • USD/CAD faces resistance at 1.2781 and 1.2828

  •  1.2661 is under pressure in support and could be tested during the day. Below, there is support at 1.2588



 


Source: Canadian dollar eyes CPI