The Canadian dollar ended the trading week on a positive note with help of supportive macroeconomic releases from Canada, which showed that the economy performs rather well and may weather monetary tightening from the nation’s central bank.
Canada’s Consumer Price Index rose 2.4 percent in June from a year ago, the fastest rate of growth in more than two years. Month-on-month, consumer prices grew 0.3 percent on a seasonally adjusted basis. Wholesale sales climbed 2.2 percent in May, year-over-year, the rate of increase being far above the predicted 0.7 percent and the April’s 1.4 percent.
The Bank of Canada conducted a policy meeting this week, leaving its main interest rate at 1 percent. In the accompanying statement, BoC Governor Stephen Poloz voiced an opinion that the pickup of inflation was caused by temporary factors:
This pickup in measured inflation is attributable to the temporary effects of higher energy prices, exchange rate pass-through and other sector-specific shocks. It is not coming from any change in domestic economic fundamentals.
USD/CAD dropped from 1.0756 to close at 1.0736, reaching the minimum of 1.0708 intraday. EUR/CAD fell from 1.4552 to 1.4479 before it settled at 1.4520. CAD/JPY climbed from 94.01 to 94.39, while its daily high was at 94.85.
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