Brown Brothers Harriman’s (BBH) Global Head of Markets Strategy Elias Haddad expects Canadian inflation to ease in January, supporting a steady Bank of Canada policy rate at 2.25% for some time. The bank’s projections point to inflation near target in Q1. Against this backdrop, Haddad anticipates USD/CAD will remain confined to a 1.3500–1.3800 range in the near term.

BOC steady as inflation cools

"Inflation is projected to ease in January, reinforcing the case that the Bank of Canada (BOC) is in good position to keep the policy rate on hold at 2.25% for some time."

"Headline inflation is seen at 2.4% y/y for a second consecutive month while core inflation (average of trim and median CPI) is expected at 2.55% y/y vs. 2.6% in December."

"We expect USD/CAD to remain within a 1.3500-1.3800 range in the near-term."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)