When is Canadian CPI report and how could it affect USD/CAD?
Canadian CPI Overview
Wednesday's Canadian economic docket features the key release of consumer inflation figures for October, scheduled to be published at 13:30 GMT. The headline CPI is anticipated to have risen by 0.3% during the reported month as compared to a reading of -0.4% recorded in the previous month. Meanwhile, the yearly rate and the BoC's core CPI are expected to hold steady at 1.9%.
How could it affect USD/CAD?
Ahead of the important release, the USD/CAD pair was seen building on the overnight strong upsurge of around 120 pips and climbed further beyond the 1.3300 handle to its highest level since October 10. Barring any major deviation, the market reaction is likely to remain muted ahead of the release of the latest FOMC monetary policy meeting minutes.
Meanwhile, a strong reading might provide a modest lift to the Canadian dollar and prompt some long-unwinding trade. However, any meaningful pullback is likely to find some dip-buying interest near the very important 200-day SMA, currently near the 1.3275 region.
Alternatively, a softer reading might provide an additional boost and lift the pair further beyond early-October swing highs resistance near the 1.3330 region. The momentum could further get extended towards September monthly highs, around the 1.3380-85 region en-route the 1.3400 round-figure mark.
Key Notes
• USD/CAD spikes to 1.3300 handle, over 1-month tops
• USD/CAD: Bulls cheer WTI weakness, risk-off ahead of Canadian CPI
• USD/CAD: the Bull is getting ready to bellow
About BoC's Core CPI
Consumer Price Index Core is released by the Bank of Canada. “Core” CPI excludes fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products. These volatile core 8 are considered as the key indicator for inflation in Canada. Generally speaking, a high reading anticipates a hawkish attitude by the BoC, and that is said to be positive (or bullish) for the CAD.