Trading Canada Core CPI 04/23/10…

CPI or Consumer Price Index is direct measurement of inflation, therefore this high impact release could have long term effect on CAD if we were to get a very strong surprise, here is the forecast for this release: 

7:00am (NY Time) CA Core CPI m/m   Forecast 0.1%   Previous 0.7%
ACTION: USD/CAD          BUY -0.2%       SELL 0.4%

We will be trading Canadian Core CPI release today and our deviation for this release based on historical track record is 0.3%, therefore I’ll be looking for tradable figures of 0.4% or better to SELL USD/CAD or a -0.2% or worse to BUY USD/CAD. 

USD/CAD has been gaining on the back of a weaker USD and stronger commodity prices.  With USD/CAD breaching parity several times in the last few weeks, market could make another significant push if this release were to surprise to the upside.  Considering the fact the BOC during this week’s rate statement dropped its pledge to keep rates unchanged until June, this may be what BOC is looking for before they start to hike interest rates.

DEFINITION:

“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households(wikipedia).”  It is also known as the “True Cost of Living”.

Our focus is on the Core CPI, or CPI ex Energy and Food components, which provides a better picture of inflation without the seasonal factor.

Related posts:

1. Forex Trading Plan For Canada Core CPI m/m 06/22/10
2. Canada Core CPI m/m 03/19/2010
3. Canada Core CPI m/m 10/16/09
4. Canada Core CPI m/m 11/18/09
5. Forex News Trading Canada Core CPI m/m 11/23/10
6. Forex News Trading Canada Core CPI m/m 04/19/11
7. Forex News Trading Canada Core CPI m/m 10/22/10
8. Canada Core CPI m/m 02/18/2010
9. Forex News Trading Canada Core CPI m/m 05/20/11
10. Forex News Trading Canada Core CPI m/m 03/18/11

Tagged as: CAD, Canada, Canadian Dollar, Consumer Price Index, Consumption, Core CPI, CPI, Cpi Index, Expenditures, Households, Inflation, Parity, Real Cost of Living