Canadian dollar slightly higher ahead of US CPI print

The Canadian dollar is trading on the thin side as investors await key inflation figures. Canada has a light economic calendar this week, with Canadian dollar slightly higher on Monday but stuck on the US dollar. The USD/CAD pair is trading at 1.3482 at the time of writing.

The Canadian dollar is underrepresented on the economic calendar this week, with important data releases ahead of next weekend. Key data prints for this week include US CPI inflation for February, which is expected to ease slightly, US Retail Sales, and a Producer Price Index update.

The New York Federal Reserve noted that US 3-year inflation expectations rose to 2.7% in February, up from the previous reading of 2.4%. US 5-year inflation expectations also rose to 2.9% from 2.5% as consumers turned less optimistic about the future.

Near-term inflation expectations held at 3% in the aggregate. A poll of economists predicts the Fed to be the first of the major central banks to cut rates, with 72 of 108 responding economists saying a first cut will be decided next June.

Tuesday’s US CPI print is expected to be mixed, with headline MoM CPI forecasting an increase and Core CPI figures declining. The YoY CPI for the year ended February is expected to hold steady at 3.1%, with MoM Core CPI expected to ease slightly to 0.3% from the previous 0.4%.