USD/CAD slipped to around 1.3975 in Asian early trading on Thursday after a BOC
rate hike bolstered the Canadian dollar. Market participants are watching US
preliminary Q3 GDP and September PCE. Oil rose on renewed concerns about Middle
East supply disruptions; as a major oil exporter, higher crude typically
supports the Canadian dollar. Brown Brothers Harriman said underlying inflation
is near the BOC’s forecast: the average YoY rate of September trimmed-mean and
median CPI was 1.85%, slightly below the BOC’s 2.0% Q3 projection. One- and
two-year business inflation expectations have risen, which could lift core CPI
prospects and reinforce the case for further tightening.
