The Canadian dollar has been flat for the past few days. As we wrote yesterday, the currency has been tracking crude oil prices recently. While the currency was supported by better-than-expected manufacturing sales yesterday, CAD ended the day flat. Today is a big day for the Canadian dollar, as we'll see CPI and Core CPI. Given recent strength in the Canadian dollar, inflation is expected to remain weak. If inflation misses estimates (1.4%), expect the currency to weaken on lower rate hike odds.
The USD/CAD exchange rate is currently above 1.2760. The euro is up against the Canadian dollar. EUR/CAD is currently above 1.5050. Lastly, the pound is up against the Canadian dollar, with GBP/CAD trading above 1.6890.
This is a fairly light week for Canadian economic releases. On Friday, we’ll see CPI and Core CPI numbers. Last week, housing starts and new build permits beat expectations while the Bank of Canada remained “cautious” in its outlook for future rate hikes.
As the Canadian dollar rebounds thanks to strengthening crude oil prices, we are now neutral on the currency in the medium-term. Looking at a weekly chart, the currency is trading within normal conditions. This is based on various technical indicators on the Canadian dollar currency index.