CAD needs a vigilant BoC to be able to put up some resistance against USD – Commerzbank

Economists at Commerzbank analyze Loonie’s outlook as Canadian inflation pressures edged lower in September.

The BoC can breathe a sigh of relief

The Bank of Canada (BoC) is likely to breathe a slight sigh of relief as inflation in September eased further than expected, both the overall rate as well as the different measures of core inflation.

The BoC is likely to feel confirmed in its decision to pause in September. It nonetheless has to signal clearly to the market that it remains vigilant if the fall turns out to be unsustainable. Only in that case will CAD be able to put up some resistance against USD.