Canadian Dollar Gains with Commodities - CPI Report Presents Risks for USDCAD

The commodity dollars dominated on a day when oil and equities climbed higher, but the Canadian dollar was the laggard compared to the Australian dollar and New Zealand dollar. The Canadian dollar will face substantial event risk on Thursday morning, as data is anticipated to show that the annual rate of Canadian headline CPI growth for August edged up to -0.6 percent from -0.9 percent. On the other hand, though, the Bank of Canada’s core measure is projected to ease back to a one-year low of1.6 percent from 1.8 percent. Such results would suggest that price declines are less the result of falling commodity costs and instead, downward pressures are starting to come into play for prices throughout the broader economy. The Bank of Canada said in their most recent policy statement that “overall risks to its inflation projection are tilted slightly to the downside,” and if we start to see even core measures of inflation fall toward zero, the Canadian dollar could pull tumble.