Core inflation in Canada for August was in line with expectations as the Consumer Price Index showed an increase of 0.8% year over year. The news that the US/Canada border will remain closed until at least the end of October is important as it impacts certain business flows. On the other hand, in a victory for Canada, the US reversed a decision to impose tariffs on Canadian aluminum. In the US, August retail sales came in below consensus estimates. But the main headline for the day is still to come with the Federal Reserve expected to provide its quarterly estimate for GDP, inflation and employment. The Fed could also provide further clarity as to when it might raise rates again. While that is not expected to be well into the future (Feb 2023), if the statement differs from expectations, then it will impact the currency markets. The Canadian dollar is flat this morning and has been remarkably stable for the last week or so. It continues to be range-bound, trading mostly between 1.312 and 1.318 for the last several sessions.
