Canadian Dollar (CAD)
The Canadian dollar is sensitive to market sentiment as a commodity currency, and last week’s improved sentiment may have provided some support. However, stable oil prices didn’t manage to support the CAD, and if worries about a tight oil supply increase, then the CAD may find support.
Market expectations suggest the Bank of Canada (BoC) may begin cutting interest rates in June, with three cuts expected throughout the year.
On a macroeconomic level, CPI rates slowed in January but remained within the bank’s inflation target. This slowdown may increase expectations for an earlier rate cut, further pressuring the CAD. Attention will turn to GDP figures for Q4 and a potential contraction could weaken the CAD. On Thursday, we note Canada’s business barometer for February, and, on Friday, Canada’s S&P manufacturing PMI figure also for February.