Weaker Canadian CPI to weigh on CAD
The CAD continues to sustain pressure this week with broader market volatility and tepid economic data, and today’s CPI figures could extend this further. Our economists forecast an above-consensus 1.6% y/y headline number, and an acceleration in the core rate as well. However this is still well below the BoC’s 2% target midpoint rate. Following a disappointing retail sales figure our Canadian economist sees downside risks to next week’s Q2 GDP release, which would add to the CAD’s short term woes, with scope to retest the July USDCAD high of 1.0609.
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BNP Paribas