USD/CAD to dip toward 200-DMA around 1.34 on underwhelming US CPI print – SocGen

Today, the US Bureau of Labor Statistics will publish March Consumer Price Index (CPI) data while the Bank of Canada (BoC) will announce its interest rate decision. Economists at Société Générale analyze how could the USD/CAD pair react to these high-tier events

BoC forecast to keep rate unchanged at 4.50%

“There should be no surprise today in Canada, where the central bank is forecast to keep rates on hold at 4.50% for the second meeting. Above-forecast GDP growth of 0.5% MoM in January, followed by another solid February output gain of 0.4% and decent March employment gains, reinforce the case for a hawkish pause.”

“A hot US CPI print would pose upside risk, but an underwhelming outcome could trigger short covering and guide the Loonie towards the 200-DMA at 1.3395.” 

See: 

• US CPI: Banks Preview, inflation softening, good news on the horizon?

• BoC Preview: Forecasts from eight major banks, staying on the sidelines