Canada's CPI to shape rate expectations
Important economic data is set to be released from the US and Canada
The USD/CAD pair rises to 1.3190 ahead of CPI numbers
Expectations are projected to come in at 3% marking the lowest level since 2021
Markets wait on retail sales data expected to rise by 0.5% up from 0.3% previous.
US retail sales under the spotlight
The US dollar has witnessed some stability for the second consecutive session ahead of the release of key US retail sales data. With expectations of a 0.5% increase in sales (MoM) after the unexpected increase in May. Estimates also see core sales, excluding car sales, rising by 0.4% compared to 0.1% previous.
The upcoming release of retail sales data in the US carries significant implications for the Federal Reserve's interest rate expectations in future meetings, thereby influencing the trajectory of the US dollar that still seems to be in the red territory.
Inflation data is also pending from Canada today while investors remain cautious after last month’s surprise rate hike. It is anticipated that the main consumer price index will rise by 3%, a decrease from the previous 3.4% and the lowest level since March 2021, yet still surpassing the bank's 2% target.
TDS expects monthly consumer prices to rise by 0.3%, with annual inflation rising by 3%. The institution indicates that food and energy may significantly contribute to index growth.
Prior to the release, the USD/CAD pair is also attempting to find stability near the 1.3195 levels, on the back of the greenback which hit its lowest levels in 15 months.