CAD Holds Steady as Inflation Data Meets Expectations

CAD Holds Steady as Inflation Data Meets Expectations

The Canadian Dollar (CAD) traded flat on Tuesday as investors digested the latest Consumer Price Index (CPI) release, which largely met market expectations.

Inflation Eases, but Not Enough to Shift BoC Policy

Canada’s inflation data revealed a modest decline in core inflation pressures, which, while notable, is not expected to alter the Bank of Canada's (BoC) monetary policy stance in the short term. The market response was muted, reflecting confidence that the BoC will stay on hold at upcoming meetings unless data trends more sharply.

Market Reaction: Calm but Watchful

The lack of significant movement in the CAD underscores a market environment that is waiting for stronger signals before re-pricing BoC rate expectations. With broader risk sentiment stable and oil prices subdued, the CAD is likely to remain range-bound in the near term.

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