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19 Feb 2016
Canadian CPI to slow, CAD recovery running out of steam - BNPP
Research Team at BNP Paribas, expects Canadian CPI inflation to slow both in the headline to 1.4% y/y and the core rate to 1.8% y/y.
Key Quotes
“While weakness in the CAD was probably the main reason the BoC did not cut rates in January, with inflation now back below target and tradeweighted CAD strengthening by 6.5% from its January lows, the risk of further BoC easing should resurface. As short CAD positioning has been reduced we think USDCAD downturn is running out of steam and expect a rebound to 1.50 by Q3.”
Key Quotes
“While weakness in the CAD was probably the main reason the BoC did not cut rates in January, with inflation now back below target and tradeweighted CAD strengthening by 6.5% from its January lows, the risk of further BoC easing should resurface. As short CAD positioning has been reduced we think USDCAD downturn is running out of steam and expect a rebound to 1.50 by Q3.”