CAD: CPI likely to print an above-consensus figure of 1.6% for October – RBC CM

Sue Trinh, Senior Currency Strategist at RBC Capital Markets, suggests that their forecast for USD/CAD will rise to 1.38 by Q2 2017 from 1.35 now and above 1.40 further out in the profile.

Key Quotes

“Event risk will increase with today’s release of the October CPI data. RBC is forecasting an above-consensus print of 1.6%y/y for the headline measure (cons. 1.5%). Increases in gasoline prices relative to a year-ago drop of 2.0% are expected to combine with an increase in natural gas prices (2.0% in October compared to a sizeable 7.4% drop a year ago) to fuel the gains from September’s 1.3% reading.”

“USD/CAD continues to sit above support at 1.3446, with a daily close below this retracement pivot required to signal a deeper pullback to 1.3388 and 1.3313. Resistance is located at 1.3521 and 1.3575.”