USD/CAD to 1.0520 before CPI

Canada’s dollar slid to the weakest level since September before data tomorrow forecast to show the consumer-price index fell below policy makers’ target, boosting the case for the central bank to keep interest rates on hold.

The currency fell versus most major counterparts after Bank of Canada Governor Stephen Poloz reiterated to lawmakers yesterday that low rates will remain appropriate until the economy shows more signs it’s gaining momentum. The central bank surprised investors after its last policy meeting by saying the next rate move won’t necessarily be higher, citing the risks of slowing inflation.

“Our team’s perspective on the Canadian dollar is now negative because the Canadian central bank is taking that position, that they’re going to keep rates low for a very long time,” Aaron Fennell, a futures specialist at Scotiabank’s ScotiaMcLeod unit, said by phone from Toronto.

Bloomberg

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