USD/CAD: Canadian inflation may have a very limited impact on the Loonie – ING
Inflation data for February will be published in Canada today. But the CPI report is unlikely to impact significantly the Loonie, economists at ING report.
Inflation a secondary factor
“Today’s inflation may have a very limited impact on CAD given the BoC's recent stance.”
“CAD should continue to lag other pro-cyclicals on any rebound in risk sentiment unless there is a clear stabilisation in market sentiment on the US banking sector.”
“At the same time, the BoC's dovishness is likely lowering the medium-term attractiveness of CAD: we continue to expect a drop below 1.30 in USD/CAD by the second half of this year, but that should primarily be a consequence of USD weakness rather than idiosyncratic CAD strength.”
See – Canadian CPI Preview: Forecasts from five major banks, inflation growth to decelerate
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