Canadian Dollar Drops, Attempts to Hold Ground

The Canadian dollar fell yesterday’s as the inflation figure disappointed traders with long positions on the currency. By the end of the trading session, the loonie erased most of the losses versus the greenback and rose against the yen.
The seasonally adjusted Consumer Price Index fell 0.1 percent in October from September. Not everything was bad, though, as the core CPI was unchanged. Moreover, retail sales jumped 1.0 percent in December. This is more than three times above the forecast of 0.3 percent.
The data was not particularly bad and this allowed the loonie to recover. Still, there are concerns that the Bank of Canada will keep interest rates extremely low and such worries contained on the currency.
USD/CAD closed at 1.0523 yesterday after rallying from 1.0515 to 1.0567 — the highest rate since August 23. EUR/CAD advanced from 1.4176 to 1.4257. CAD/JPY fell from 96.15 to 95.68, but bounce to 96.26 by the end of the trading session.

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