CAD Weekly Soundbites (Rates and FX)

RBC projects Canada's April CPI to rise to 3.1% and expects the Bank of Canada to remain on hold through 2026. USD/CAD is expected to trade within a 1.3500-1.3900 range as rate differentials provide a floor.

Key Takeaways

• 1.April CPI in Canada is expected to accelerate to 3.1% yoy, driven by higher energy costs, though underlying price pressures remain contained.
• 2.The Bank of Canada is expected to remain on hold through 2026, with the first potential rate hikes not forecast until 2027.
• 3.USD/CAD is projected to stay within a 1.3500-1.3900 range, currently biased toward the upper end due to wide yield differentials and the USD's safe-haven status.

Table of Contents

• Key things to watch
• Rates View
• FX View
• Positioning charts
• Technical chart (I) – CA 10Y yield: Key triple top back in view
• Technical chart (II) – USD/CAD: Corrective phase gains momentum
• Disclaimer

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