Elias Haddad, global director of markets strategy at Brown Brothers Harriman (BBH), expects Canadian inflation to decline in January, keeping the Bank of Canada interest rate steady at 2.25% for some time. The bank’s projections indicate inflation in the first quarter close to the target. In this situation, Haddad predicts that the USD/CAD pair will remain narrow to the range of 1.3500-1.3800 in the near term.

BOC stable as inflation declines

“Inflation is expected to decline in January, reinforcing the view that the Bank of Canada (BOC) is well-positioned to keep its policy rate at 2.25% for some time.”

“Head inflation is at 2.4% y/y for the second month in a row, while core inflation (trimmed average and median CPI) is expected to amount to 2.55% y/y compared to 2.6% in December.”

“We expect USD/CAD to remain in the range of 1.3500-1.3800 for the foreseeable future.”

(This article was created with the aid of an artificial intelligence tool and has been reviewed by an editor.)