Canada's Cycle Downshifts

CAD is becoming increasingly vulnerable.

Canada’s January CPI print came in today softer than expected, with headline inflation easing to 2.3%, down from 2.4% in December and showing a loss of near-term price momentum after the stronger prints seen late last year.

CAD was already on our radar in recent weeks after the dismal employment report from earlier in February. When you add other factors into the mix, including our bias for lower oil prices from here and zero interest rate cuts priced for 2026, it’s starting to make a compelling case for a medium-term short.