Canadian inflation data for August is due for publication today. Economists at Commerzbank analyze how the CPI report could impact the CAD.
CAD might be able to benefit from a comparatively more hawkish BoC
There are fears that inflation could surprise to the upside. If that is the case, this will re-fuel rate hike speculations, which might support CAD.
In the run-up to the Fed decision on Wednesday, the market is likely to be reluctant to position itself clearly though as it is uncertain what surprises the Fed decision might bring.
If there were going to be any signals that the US central bank’s rate might have peaked, CAD might be able to benefit from a comparatively more hawkish BoC.
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