USD/CAD could slip further to 1.34 on a potential post-CPI rally – ING

Market news

19 September 2023

USD/CAD could slip further to 1.34 on a potential post-CPI rally – ING

Economists at ING analyze how Canadian inflation data could impact USD/CAD and BoC’s rate hike expectations.

Canadian CPI may put a BoC hike back on the table

Any upside surprise in the inflation figures would likely put a BoC rate hike back on the table, even though it is not our base case at the moment to see another BoC move.

Markets are pricing in 15 bps to a peak, and we could see that being pushed to 20 bps or higher after a strong CPI read today.

Given its stretched overvaluation, we had been calling for a correction in USD/CAD for a while: the pair is reconverging (i.e., dropping) with short-term fundamentals now, and a potential post-CPI rally could see it slip further to 1.3400.

See – Canada CPI Preview: Forecasts from five major banks, another jump in inflation

Higher Oil prices and decreased pessimism about China can support AUD and CAD – SocGen

Reuters Poll: ECB to wait until at least Q3 2024 before cutting rates

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer

Open Demo Account & Personal Page

Personal area

support@teletradepartners.com

Risk Warning: Trading in the financial markets (including trading on margin) provides a wide range of opportunities and enables investors ready to take risks to make high profits, but it carries a potentially high level of risk of loss. Therefore, prior to trading you should take into careful consideration whether such operations are suitable for you in terms of your level of knowledge and financial situation.