FX Daily Snapshot

The US dollar faces depreciation pressure following a weaker-than-expected CPI print that reduced expectations for imminent Fed hikes. Meanwhile, the Bank of Canada remains cautious, keeping the CAD outlook modest despite energy price support.

Key Takeaways

• 1.Weaker-than-expected US CPI data has reduced the near-term probability of a Fed rate hike.
• 2.Fed Chair Warsh's firm communication style and focus on the 2% inflation mandate are curbing expectations for dollar weakness despite lower CPI.
• 3.The Canadian Dollar (CAD) faces downside risks as the Bank of Canada (BoC) is expected to remain patient given mixed macro data, despite energy price support.

Table of Contents

• US dollar's key pillar of support is weakened
• USD: Pressure eases notably on the Fed to hike
• CAD: BoC on hold with inflation risks more contained
• KEY RELEASES AND EVENTS

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