CAD little changed in upper 1.35s – Scotiabank

The Canadian Dollar (CAD) is little changed ahead of the 8.30ET August CPI release, Scotiabank’s Chief FX Strategist Shaun Osborne notes.  

CAD holds breath ahead of CPI data

“Headline inflation is forecast to be unchanged over the August month, pulling the year-on -year pace of price growth down to 2.1%. Core Median and Trim CPI measures are both called down 0.2 percentage points on the year to 2.2% and 2.5% respectively. Results in line with expectations will reflect the moderation in inflation tracking close to BoC expectations for Q3 so far, suggesting little need for the Bank to up the pace of easing.”

“Inevitably, a more aggressive move from the FOMC this week will spill over into domestic rate expectations to some degree but with 75bps of cuts already in the bag, BoC policymakers can remain measured. Note that Senior DG Rogers is speaking this evening at 18ET Meanwhile, a byelection loss in Montreal for the Liberal Party yesterday will increase pressure on the minority government in Ottawa as parliament returns from its summer break this week.”

“Spot remains range bound in the upper 1.35 area, with the market continuing to pivot around the 200-day MA (1.3587). The USD’s technical undertone remains firm but the lack of progress over the past week does suggest some loss of upward momentum. Short-term technical resistance remains 1.3635 (38.2% retracement of the USD’s August decline) and 1.3695 (50% Fibonacci). Support is 1.3550 (minor, last Monday’s low) and 1.3465.”