The Canadian Dollar little changed ahead of Consumer Price Index (CPI) data. Strong monthly figures could help the Loonie to cope with USD strength, economists at Scotiabank report.

USD gains should resume above 1.3475/80

“Jan CPI data is forecast to rise 0.6% in the month. Headline inflation is likely to slow somewhat 6.1%, from 6.3%, and core inflation is expected to slow somewhat as well.” 

“Strong, monthly gains in prices and still elevated core price pressures will bolster market expectations that the Bank of Canada still might have to tighten monetary policy still further. This should help contain CAD losses against the stronger USD to recent ranges and give the CAD a boost on the crosses.” 

“We expect USD support on dips to the low/mid 1.34s.”

“Resistance is 1.3475/80. USD gains should resume above this point.”

See – Canadian CPI Preview: Forecasts from six major banks, downward path could see a minor detour