• The Canadian Consumer Price Index is seen gathering some upside traction in March.
• The BoC deems risks to the inflation outlook to be balanced.
• The Canadian Dollar navigates five-month lows against the US Dollar.
   

Canada is set to disclose the latest inflation figures on Tuesday, with Statistics Canada releasing the Consumer Price Index (CPI) for March. Forecasts suggest a 3.1% year-on-year increase in the headline figure, accelerating from February’s 2.8% rise. Projections for the month anticipate a 0.7% increase in the index compared to the previous month's 0.3% reading.

In addition to the CPI data, the Bank of Canada (BoC) will unveil its core Consumer Price Index measure, which omits volatile components such as food and energy expenses. February’s BoC core CPI showed a 0.1% monthly increase and a year-on-year uptick of 2.1%.

These figures will be closely watched as they have the potential to impact the direction of the Canadian Dollar (CAD) in the very near term and shape perspectives on the Bank of Canada's monetary policy. Regarding the Canadian Dollar (CAD), it has exhibited weakness against the US Dollar (USD) in recent sessions and currently remains near five-month lows significantly beyond the 1.3700 yardstick.