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The CPI release will go unnoticed for the CAD which is more preoccupied with the state of markets and abrupt shift in the economic outlook due to virus mitigation efforts, in the opinion of economists at TD Securities. 

Key quotes

“TD looks for headline CPI to recede to 2.1% y/y in February after printing at a two-year high of 2.4% last month. This is consistent with a 0.4% increase on the month, driven by seasonal factors in apparel, recreation, and travel services.”

“We think that USD/CAD’s recent surge above 1.40 will likely be home for the pair for the foreseeable future. 1.4326 marks the next resistance level and offers a natural breathing point for USD/CAD.

“As the currency pair has now adjusted to the new monetary policy reality, we reckon that as data becomes more available over the next several weeks, USD/CAD will eventually need to adjust higher to the new growth reality.”