Canadian Dollar: Data volatility guides Bank of Canada – Commerzbank
Commerzbank analysts Norman Liebke and Michael Pfister report that the Bank of Canada kept its policy rate at 2.25% but adopted a more hawkish tone as inflation risks rise from higher energy prices and trade tensions with the US.
At press time on Friday, the US Dollar Index (DXY) saw a marginal increase to around 99.07 as investors awaited the United States Nonfarm Payrolls (NFP) data for August, scheduled for release at 12:30 GMT. Analysts from TD Securities anticipate that the upcoming NFP report could lead to mixed reactions in rate markets. Should the employment data exhibit a firm reading, it may bolster speculation of further Federal Reserve (Fed) rate hikes; however, inflation concerns continue to keep markets cautious, potentially limiting the extent of the Fed's rate hike path until the subsequent Consumer Price Index (CPI) data is unveiled.
Conversely, a modestly softer payroll report could provide an opportunity for the market to reassess near-term policy expectations, with downside surprises in employment data likely to have a more pronounced impact than upside surprises.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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