The Canadian Dollar remains under pressure against the US Dollar amid ongoing market fluctuations. Meanwhile, the EUR/USD pair has managed to erase earlier losses, turning positive above 1.0900 during the European session on Wednesday. Market participants are closely monitoring developments as headline inflation in Canada continues to stay below the Bank of Canada's 2% target. In a broader context, the easing of the US-EU tariff war has paved the way for traders to shift their focus toward crucial US Consumer Price Index (CPI) inflation data, set for release at 12:30 GMT.
Investors are poised to scrutinize the details of the upcoming CPI report, which is expected to provide insights into the potential impact of tariffs on the economic outlook. Additionally, the report will offer vital clues regarding how these factors might influence the Federal Reserve's policy stance. The anticipated release has generated considerable interest, with market consensus pointing towards a deceleration in all inflation measures, both monthly and yearly, as annual inflation in the US is projected to soften to 2.9% in February.
Adding to the intrigue, Governor Tiff Macklem's press conference will be closely followed by market participants. The Bank of Canada is widely expected to cut its policy rate by 25 basis points, a move that could have significant ramifications for future economic policies. The decision comes amid a backdrop of subdued inflationary pressures and a Canadian economy grappling with external challenges.
Elsewhere in the commodities market, gold prices maintain their upward trajectory, holding onto weekly gains and trading above $2,915 as of Wednesday. This resilience in gold prices underscores investor sentiment amid uncertainties surrounding inflation data and central bank policies.