USD/CAD: Firm support is at 1.3595/00 – Scotiabank

Focus for the Canadian Dollar (CAD) this morning falls squarely on inflation. Canada reports June CPI at 8.30ET, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

June CPI is due today

“The street (and Scotia) is looking for a 0.1% rise in headline prices in the month and a 2.8% rise over the year—to reverse a little at least of the uptick to 2.9% seen in the May data.”

“Core measures are expected to moderate a tenth from May. Data in line with expectations will bolster expectations that the Bank will follow up on June’s rate cut with another 25bps reduction next week (19-20bps priced in) and should help underpin USD/CAD’s range base around the 1.36 area, close to where we assess spot fair value sits, for now.”

“The CAD is little changed in overnight trade. A solid rise in the US Dollar off yesterday’s low has not seen any additional follow through demand in overnight trade. Intraday price patterns suggest a minor top/reversal may be developing around 1.3695 (1.3750/55 is major resistance above here) which may see spot drift to test minor support at 1.3645/50. Firm support is at 1.3595/00.”