CPI data broadly on market
CAD remains on the backfoot, USD/CAD seen higher, though overbought
Canada CPI release certainly firm in the month, especially on headline - but on market expectations for median and trim and with both at or just marginally above 2%.
While there’s a bit of consolidation and backfilling of the recent weakening, with new year highs on USD/CAD, CAD looks set to remain on a weaker footing near-term: pressured by noise and risk-discounting around USMCA, generalised US-yield-supported dollar strength, and commodity pullbacks. 1.42/4290 are the next upside levels on the pair and expected to be seen this month, though the market is currently overbought.