Mon. May 20th, 2024

USD/CAD CLIMBS ABOVE 1.3800 AFTER MIX CANADIAN INFLATION DATA

CANADIAN DOLLAR USD/CAD REMAINS VULNERABLE AFTER STRONG US RETAIL SALESCANADIAN DOLLAR USD/CAD REMAINS VULNERABLE AFTER STRONG US RETAIL SALES

The USD/CAD pair jumps to 1.3820 in Tuesday’s early New York session after Statistics Canada reported a mixed Consumer Price Index (CPI) report for March.

  • USD/CAD rises to 1.3820 as mixed Canadian inflation report keeps BoC rate cut hopes firm.
  • BoC’s preferred inflation gauge softens to 2.0% on a year-on-year basis.
  • The US Dollar hovers near a six-month high as the Fed is expected to delay rate cut plans.

The USD/CAD pair jumps to 1.3820 in Tuesday’s early New York session after Statistics Canada reported a mixed Consumer Price Index (CPI) report for March.

The agency showed that monthly headline CPI grew by 0.6%, slower from expectations of 0.7% but higher than the prior reading of 0.3%. However, the annual headline inflation data accelerated to 2.9% from the prior reading of 2.8%.

The monthly Bank of Canada (BoC) CPI core data, which excludes eight volatile items, rose sharply by 0.5% compared to a meagre 0.1% growth in February. However, the annual core CPI slowed to 2% from the prior reading of 2.1%.

The return of the BoC’s most preferred inflation measure to a desired rate of 2% is expected to allow the Bank of Canada (BoC) to start reducing interest rates, which are currently expected from the June policy meeting.

Last week, BoC Governor Tiff Macklem said a rate cut in June is possible if inflation continues to decelerate sustainably after the BoC keeps interest rates unchanged at 5%.

The BoC has kept interest rates steady at 5% since July 2023 to maintain downward pressure on consumer price inflation.

Meanwhile, significant demand for safe-haven assets due to worsening geopolitical tensions and faded speculation for Federal Reserve (Fed) rate cuts for the June and July policy meetings have built pressure on the Canadian Dollar.

The US Dollar Index (DXY) falls slightly from a five-month high of 106.44. The near-term demand for the US Dollar remains intact as investors see the Fed keeping interest rates higher for a longer period.

Inflation remaining higher than expectations for three months in a row suggests that there should be no urgency for rate cuts.

USD/CAD

Overview
Today last price1.3808
Today Daily Change0.0020
Today Daily Change %0.15
Today daily open1.3788
Trends
Daily SMA201.3594
Daily SMA501.3544
Daily SMA1001.3486
Daily SMA2001.3517
Levels
Previous Daily High1.3794
Previous Daily Low1.3725
Previous Weekly High1.3787
Previous Weekly Low1.3547
Previous Monthly High1.3614
Previous Monthly Low1.342
Daily Fibonacci 38.2%1.3767
Daily Fibonacci 61.8%1.3751
Daily Pivot Point S11.3744
Daily Pivot Point S21.3701
Daily Pivot Point S31.3676
Daily Pivot Point R11.3813
Daily Pivot Point R21.3837
Daily Pivot Point R31.3881

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