Yesterday’s Canadian inflation data for February was weaker than expected. Economists at Commerzbank expect the Loonie to remain under downside pressure.

Canadian inflation rates in February slightly better than expected

“The overall rate fell more notably than expected from 5.9% to 5.2%. The core rates (trim, median) on average fell as expected, leaving them slightly below the 5% mark.”

“The data is likely to have now made it clear for the market that further rate hikes are unlikely for the time being, above all while inflation continues to trend downwards. That is putting pressure on the Loonie, as it stands in contrast with the market’s Fed expectations.”

“As market attention will today focus on the Fed decision, the minutes of the last BoC meeting will remain an aside, in particular as the meeting was held prior to the recent financial market turbulence.”