On Wednesday, inflation data from Canada will be released. Market consensus sees a 1% increase in the Consumer Price Index. Analysts at TD Securities expect a 0.9% increase fueled by gasoline and food prices. They consider declines in USD/CAD are likely hard to sustain. 

Key Quotes: 

“We look for CPI to strengthen to 7.2% y/y in May, fueled by another large contribution from gasoline and food prices. Core components should also see another strong gain, led by shelter and airfares/travel services. The BoC's core measures should firm by 0.1pp on average (to 4.3%) and we do not anticipate a significant impact from new basket weights.”

“Despite inflation, the BOC (Bank of Canada) will struggle to keep up with the Fed on tightening. Dips in USD/CAD are likely hard to sustain, especially as the impact of higher rates begins to filter into the data in the coming weeks. 1.2860/00 key support and 1.3080 notable resistance in USD/CAD.”