With a light week in terms of economic data, the Canadian dollar has been treading water for the first few days of this week, trading between 1.3690 and 1.3790 versus the US dollar. However, the latter half of the week includes the Bank of Canada’s (BoC) latest Summary of Deliberations, slated to be released on Wednesday, as well as Canadian Retail Sales coming out on Friday.
Wednesday morning’s US inflation report, the consumer price index (CPI), indicated that inflation rose by 3.3% annually last month, while core prices climbed by 3.4%. This marks the smallest year-over-year increase since 2021. The cooling inflation could boost the likelihood of the Federal Reserve cutting interest rates later this year, especially as the Fed concludes its policy meeting today.
With global political uncertainty abound after the surprising EU Parliament elections, which saw far-right parties gaining across most European nations, financial markets are taking a risk-off approach this morning. The most notable results were in France, where President Macron called a snap election for the end of June in what is being described as an all-or-nothing gamble.
The Canadian dollar is drifting within a narrow range against the USD during Monday’s trading session. Markets are looking past weaker-than-expected manufacturing numbers published on Monday from both north and south of the border as they focus on the Bank of Canada’s interest rate announcement on Wednesday, June 5th.
