The Canadian dollar today weakened against the US dollar after the release of disappointing Canadian inflation data by Statistics Canada. The Consumer Price Index report for the month of May disappointed both on a monthly basis and also on an annualized basis.
The USD/CAD currency pair rallied by close to 100 points from its daily low after the release of the inflation report to hit a daily high of 1.3307. The currency pair has since retraced some of its gains.
The USD/CAD opened the day’s session trading in a tight range, but the CPI report triggered a massive rally as the loonie weakened against the greenback. The Canadian CPI for the month of May increased by 0.1% versus the expected 0.2% increase. The annualized CPI also rose by 1.3% as compared to the expected increase of 1.5%.
The release of weak Markit US Manufacturing PMI data for June, which came in at 52.1 versus the expected 53.0 and the previous 52.7 had minimal impact on the currency pair. The Markit US Services PMI also disappointed as it was recorded at 53.0 versus the expected 53.5. However, the US new home sales in May released by the Census Bureau beat expectations by coming in at 610,000 versus the expected 590,000, which neutralized the impact of the weak Markit data.
The performance of the currency pair over the short-term is likely to be influenced by global oil prices and the release of US durable goods orders slated for Monday.
The USD/CAD currency pair was trading at 1.3264 as at 14:49 GMT having retraced some of its gains from a high of 1.3307. The CAD/JPY was trading at 83.87 having dropped from a daily high of 84.24.
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