At 7:00 ET on Friday, Canadian CPI for November is anticipated to plunge 0.8 percent during the month while the annualized pace is forecasted to tumble to an 8-month low of 1.5 percent. Meanwhile, the Bank of Canada’s core CPI measure may slip to 1.6 percent from 1.7 percent. Given the sharp drop in commodity prices since the summer and slowing in the Canadian economy, there is potential for weaker-than-expected readings. This leaves some bearish potential open for the Canadian dollar, especially as a decline in CPI below the BOC’s 2 percent target would add to speculation that the bank will continue cutting interest rates. On the other hand, signs that price growth is not slowing in line with the BOC’s forecasts could push the Canadian dollar higher.
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