The markets are anticipating Canadian inflation data

The movement of the Canadian dollar will be significantly impacted by the Canadian inflation data

By Laila Eid | @Laila Eid | 5 July 2023

  • Gold prices continue to decline and have reached levels of $1966 per ounce

  • Global markets are optimistic

  • oil prices have risen to $68 per barrel

Risk appetite dominates the markets due to Credit Suisse

As global stocks rose on Tuesday following the government-backed takeover of Credit Suisse by UBS. This helped alleviate concerns about European financial stability, and European bank stocks rose by approximately 4%. Additionally, oil prices rose on Tuesday after the previous day's record low, as Credit Suisse's rescue eased concerns about global banking sector risks that could harm economic growth and fuel demand.

Profit-taking continues to control gold trading

With prices now hovering around $1960 per ounce after reaching $2000 per ounce at the beginning of the weekly trading session, market focus is on the Federal Reserve's decisions tomorrow. Most expectations now support a quarter-point interest rate hike. However, the possibility that the Fed will leave interest rates unchanged weighs on the performance of the US dollar against most currencies and commodities.

The markets are eagerly awaiting inflation data from Canada

In the coming hours, the Canadian Consumer Price Index is expected to rise annually by 5.4%, compared to 5.9% in January. This would be the lowest CPI since January 2022, but still well above the target range of 1-3%. On a monthly basis, it is expected to rise by 0.6%, following a 0.5% increase in January. It is worth noting that the Bank of Canada kept interest rates at 4.50% and indicated that the Canadian economy is under significant pressure. Expectations are that the Bank of Canada will maintain interest rates at the upcoming meeting and may lower them again if the situation warrants.