Canada’s February inflation rate was 2.6%, higher than the expected 2.2%. Since this is well above the Bank of Canada’s (BOC) 2% target, expectations for interest rate cuts in Canada have weakened, pushing CAD/JPY above 105 at one point.
However, as the U.S. dollar weakened, CAD/JPY dropped back to around 104, showing strong resistance at higher levels.
With rising inflation, the chances of a rate cut in Canada in April have decreased. However, concerns about Trump’s tariffs could limit the strength of the Canadian dollar.
Today, the Bank of Japan (BOJ) is expected to keep interest rates unchanged. But since Japan may raise rates in the future, the narrowing interest rate gap could lead to more selling of CAD/JPY.
CAD/JPY Price Range Forecast: 105.00 – 103.50
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