Canadian Dollar Spins in Circles as Traders Await Key Data

Canadian Dollar trading began the week with little movement. The Loonie stayed flat as investors waited for new signals from inflation data and the Jackson Hole symposium.

 

Canadian Dollar Stays Quiet Ahead of Inflation Release

The Canadian Dollar opened Monday with no clear direction against the US Dollar. The USD/CAD pair hovered close to 1.3800, showing hesitation after last week’s safe-haven demand for the greenback. Losses have been limited, but the Loonie has yet to regain strength.

All eyes are now on Canada’s July Consumer Price Index (CPI). Economists expect annual inflation to cool to 1.7%. Monthly inflation, however, is forecast to rise by 0.4%. The Bank of Canada’s core inflation reading last stood at 2.7% year-over-year. These figures will be important, as they may guide expectations for future policy decisions.

Jackson Hole Symposium Could Steer Markets

Traders are also looking beyond Canada. The Jackson Hole Economic Symposium starts on Thursday. On Friday, US Federal Reserve Chair Jerome Powell will deliver his speech. Markets will study his comments closely.

Why? Because US inflation has shown signs of heating up again. That has already changed market expectations for interest rates. Any fresh signals from Powell could bring more volatility to the Canadian Dollar.

Canadian Dollar Price Forecast

The Canadian Dollar remains in a narrow range. USD/CAD is stuck between two key technical levels. Resistance is near the 200-day Exponential Moving Average around 1.3850. Support is close to the 50-day EMA at 1.3755.

Until stronger economic or policy signals appear, the Canadian Dollar is likely to stay in this sideways pattern. The coming inflation report and Powell’s speech could be the turning point traders are waiting for.

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