Canadian inflation also slipping
Canadian CPI has fallen by 0.4% in September, larger than the 0.2% dip expected. However, the annualised rate is unchanged at 1.9%, though markets were looking for a rise to 2.1%. Common CPI is a touch higher at 1.9%, in line with core CPI, with median and trimmed readings coming in at 2.2% and 2.1% respectively.
There was a very slight push up in USD/CAD, but overall, these numbers are not bad enough to cause a CAD sell-off on their own - put into context against some strong jobs numbers at the end of last week which lifted the currency, but only into the mid 1.3100's.
As such, it remains the case that traders are expecting the BoC to eventually soften their stance on monetary policy, and in light of this, there seems to be little opportunity to buy the CAD with any confidence at the moment. 2 consecutive employment reports cannot lift the CAD, and any weakness in the data see sellers ready to pounce. The risk - it seems - remains to the upside - for now at least.