Will the Canadian CPI rise from the previous month's 4.0%, leading to a rise in the Canadian dollar?

Will the Canadian CPI rise from the previous month's 4.0%, leading to a rise in the Canadian dollar?

17.10.2023

In yesterday’s U.S. currency trading, the Canadian dollar rose against the yen after Canada’s August wholesale sales, released yesterday, improved from 0.2% to 2.3% month-over-month. The CAD/JPY pair rose from 109.214 to 109.982. This rise occurred even as the U.S. dollar, its neighbor, faced resistance against the yen.Technically, the CAD/JPY pair is rising from the bottom of its 4-hour 20-MA, and on the daily chart, the RSI is rising near 55.7, just shy of overbought territory. We will need to assess carefully whether the Canadian dollar will continue to strengthen against the yen.

European currencies saw the pound rise against the yen yesterday after MPC member Pill stated, “The BOE has done a lot regarding inflation, but we cannot say our job is done simply because inflation has fallen.” The GBP/JPY pair rose from 181.140 to 182.744, climbing just below the 200-period SMA on the 4-hour chart.With the UK CPI release scheduled for tomorrow, we should remain cautious of a potential rise in the pound depending on the CPI results.

Today’s schedule includes UK employment figures at 3:00 PM, the German and Eurozone ZEW Economic Sentiment Indices at 6:00 PM, Brazil’s inflation index at 8:00 PM, remarks by John Williams, President of the New York Fed, at 9:00 PM, Canadian housing starts at 9:15 PM, Canadian government bond turnover at 9:30 PM,Canada’s Consumer Price Index and U.S. Retail Sales, at 10:00 PM, remarks by U.S. Federal Reserve Governor Bowman, at 10:15 PM, U.S. Industrial Production and U.S. Capacity Utilization, at 11:00 PM, U.S. Business Inventories and U.S. NAHB Housing Market Index, and at 2:00 AM, remarks by German Bundesbank President Nagel.We should watch for movements in the Canadian dollar depending on whether Canada’s CPI rises from the previous month’s 4.0%.