FX TALKING POINTS:
USD/CAD EXTENDS BULLISH SEQUENCE AS CANADA CONSUMER PRICE INDEX (CPI) DISAPPOINTS. TOPSIDE TARGETS REMAIN ON THE RADAR.
USD/CAD extends the bullish sequence from earlier this week, with the pair at risk for a larger advance as updates to Canada’s Consumer Price Index (CPI) does little to boost bets for another Bank of Canada (BoC) rate-hike in 2018.
With the headline reading of 2.3% falling short of market expectations for a 2.4% clip, the below-forecast print is likely keep the Canadian dollar under pressure as its encourages the BoC to keep the benchmark interest rate at record-low throughout the first-half of 2018. The fresh remarks from Governor Stephen Poloz and Co. suggest the central bank remains in no rush to implement higher borrowing-costs as ‘some monetary policy accommodation will still be needed to keep inflation on target,’ and the recent series of dismal data prints are likely to keep the BoC on the sidelines at the next meeting on May 30 as‘GDP growth in the first quarter was weaker than the Bank had expected.’
In turn, the topside targets coming back on the radar for USD/CAD, with the pair at risk for a near-term correction amid the failed attempt to test the Fibonacci overlap around 1.2440 (23.6% expansion) to 1.2510 (78.6% retracement).