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 September, scheduled to be published at 12:30 GMT. The headline CPI is anticipated to have edged lower by 0.2% during the reported month. Conversely, the yearly is seen rising to 2.1% as compared to 1.9% in August. Meanwhile, the BoC's core CPI is expected to remain flat on a monthly basis and hold steady at 1.9% yearly rate.

Deviation impact on USD/CAD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction on the pair is likely to be around 43-pips during the first 15-minutes and could get extended to 66-pips in the following 4-hours in case of a relative deviation of -0.86. Alternatively, the reaction to a higher than expected reading, with a relative deviation of +0.68 or higher could be around 61-pips in the first 15-minutes and 75-pips in the following 4-hours.

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How could it affect USD/CAD?

Ahead of the important releases, the USD/CAD pair struggled to register any meaningful recovery and remained well within the striking distance of one-month lows set last Friday. Given the pair's inability to capitalize on the attempted recovery moves, a stronger reading might be enough to prompt some aggressive selling and accelerate the slide further towards September monthly swing lows support near the 1.3135-30 region.
 
Alternatively, a softer reading might prompt some near-term short-covering bounce, though is likely to face some stiff resistance near the very important 200-day SMA – around mid-1.3200s. Sustained strength beyond the mentioned hurdle should provide an additional lift and assist the pair to aim back towards reclaiming the 1.3300 round-figure mark.

Key Notes

Canada: CPI in focus this week – NBF
 
USD/CAD fails to extend recovery gains as challenges to US-China trade deal increase
 
USD/CAD: a break above 1.3240 meets a selling opportunity at 1.3270

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.

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