USD/CAD: Loonie may not fall out of markets’ favours just yet as BoC will go for another hike in July – ING

FXStreet Insights Team FXStreet

Today’s inflation data in Canada will be key to driving market expectations for the BoC’s July decision. Economists at ING analyze CAD outlook.

Inflation numbers in focus

Consensus is looking for a rather substantial slowdown in headline inflation from 4.4% to 3.4%, while the core measure should decelerate to around 4.0%. We are still inclined to think that the BoC will go for another hike in July, and it may take a sub-consensus read in underlying inflation today to convince them not to.

Either way, with the Fed still threatening to tighten more, it seems hard to fully price out BoC tightening down the road, and CAD – which has the best volatility-adjusted carry in G10 – may not fall out of markets’ favours just yet.

We still target sub-1.30 levels in the third quarter.

See – Canada CPI Preview: Forecasts from six major banks, inflation expected to decelerate sharply in May

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD remains offered below 1.3600

GBP/USD resumes its decline, reversing Tuesday’s bullish attempt and breaking below 1.3600 the figure on Wednesday. Cable’s marked pullback follows a firm advance in the Greenback as investors continue to assess latest US data as well as the geopolitical landscape.

EUR/USD remains on the back foot around 1.1650

EUR/USD comes under renewed selling interest, slipping back to the mid-1.1600s ahead of the opening bell in Asia. Spot loses momentum on the back of solid gains in the US Dollar in a context of unabated geopolitical tensions and steady caution ahead of key US data releases and Chair Warsh’s speech at the Jackson Hole Symposium on Friday. Looking ahead, the ECB will publish its Accounts on Thursday.

Gold puts $4,600 to the test amid USD gains

Gold now faces some renewed downside pressure and seems to challenge the key $4,600 mark per troy ounce on Wednesday. That said, the yellow metal’s correction comes after three daily upticks in a row, fading at the same time the recent move to fresh tops around $4,700. The stronger US Dollar and a decent rebound in US Treasury yields across the curve continue to weigh on bullion.

Bitcoin vs Gold Price Prediction: Rally cools as US PCE inflation holds steady

Bitcoin (BTC) is edging lower, trading slightly above $78,000 on Wednesday. This correction comes after last week’s rally and the subsequent rejection around $81,000. The decline reflects cooling sentiment amid overheated market conditions and increased profit-taking.

Nvidia: How will the company perform as its switches from a chip maker to an AI finance house?

The main event for markets this week takes place this evening, after US markets close. Nvidia, the AI giant, will report results for last quarter. Another monster report is expected. Revenues could come in above $92bn, and earnings per share could come in at $2.09.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.