Canadian Dollar Weakened as USD/CAD Climbs Ahead of US Inflation Data

The Canadian Dollar has weakened against the US dollar ahead of key US inflation data. As of Thursday, the USD/CAD pair was trading around 1.3820, up 0.11% on the day.

Investors are waiting for the release of the United States Producer Price Index (PPI) data for August, scheduled for 12:30 GMT. The inflation data is expected to influence expectations surrounding the Federal Reserve's next policy decision.

The PPI is forecasted to accelerate to 5.3% YoY in August from 4.7% in July, while the core index is expected to rise to 4.6% from 4.2% previously. Stronger-than-expected figures could fuel concerns about persistent inflationary pressures and reinforce expectations that the Fed will raise interest rates at its upcoming meeting.

Strategists at Scotiabank describe the Canadian Dollar as 'all but unchanged on the session, a stoic response to the latest developments in the US/Canada trade spat.' They note that the CAD has held firm despite news of President Trump's weekend post on 'Canada's dollar imbalance.'