Forex Field Guide for Canadian Dollar (SEP 2022 CPI update)

Reference guide covering Fundamental, Sentiment and Technical factors of the CAD

FUNDAMENTAL ANALYSIS

-OVERNIGHT RATE-

The rate was hiked on September 7th to 3.25 percent after an expected 75 bps hike. There were no projections at this meeting but previously in July they raised the forecast for inflation (7.2% 2022) and lowered it for GDP (3.5% 2022).

The outlook for interest rates is slightly hawkish as Trading Economics forecast a rise to 3.25 percent this quarter (Q3) and then 4.0% next year (2023) which had previously been forecasted at 2.50 percent.

The next meeting is on Tuesday October 26th and the initial consensus is yet to be published.

-GROSS DOMESTIC PRODUCT GROWTH RATE (GDP)-

The Q2 over Q1 report printed on August 31st and showed an expansion of 0.80 percent which is 0.20 percent lower than expected and matched the report for Q1 (0.80). Net foreign demand contributed negatively to real GDP growth, as the substantial rise in imports (6.9 percent) outpaced the slight rebound for exports (2.6 percent).