Canadian dollar quiet ahead of Canadian CPI

  • Canada inflation expected to drop to 3.2%
  • US releases FOMC minutes

The Canadian dollar continues to have a quiet week. In the European session, USD/CAD is trading at 1.3709, down 0.12%. We could see stronger movement in the North American session, with the release of Canada’s inflation report.

Canadian inflation expected to drop

Canada’s inflation rate has been dropping and the markets are expecting good news from today’s inflation release. October inflation is expected to have declined to 3.2%, compared to the 3.8% gain in September.  Monthly, CPI is expected to increase to 0.1%, up from -0.1% in September. CPI Trimmed Mean, a key core inflation gauge, is projected to dip to 3.6%, down from 3.7% in September.

The expectations for the rosy inflation report are based on the sharp decline in gasoline prices, with crude oil plunging about 10% in October. As well, the rise in food prices has slowed. Inflation is still well above the 2% inflation target, but inflation has been moving in the right direction and another drop will be an encouraging sign for the Bank of Canada.

The central bank has held rates at 5% at its past two meetings, as GDP has slowed and the employment market is showing some cracks in its resilience. The BoC has stressed that it is prepared to raise rates again if needed, but another pause at the December meeting will raise expectations that rates have peaked and there is talk of a rate cut in mid-2024.

All eyes will be on the Federal Reserve, which releases the minutes of its November meeting later today. At the meeting, the Fed held rates at 5.25-5.50% for a second straight time. Fed Chair Powell struck a hawkish note after the meeting, saying that inflation remained too high and left the door open to further rate hikes. The minutes will likely have a similar message and that could provide a boost to the sluggish US dollar.


USD/CAD Technical

  • 1.3638 and 1.3552 are providing support
  • There is resistance at 1.3741 and 1.3827

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.