The USD/CAD currency pair today spiked briefly to new highs after the release of positive US CPI data, but quickly erased most of its gains to continue trading sideways. The release of Canada’s new housing price index might have contributed to the pullback despite being lower than the previous figure.
The USD/CAD currency pair spiked to hit a daily high of 1.2239 before retracing most of its gains to trade below the 1.2200 psychological barrier.
The currency pair’s brief spike was triggered by the release of the headline US inflation data tracked by the CPI. The CPI data released by the Bureau of Labor Statistics beat expectations by recording a 1.9% annualized increase as compared to the expected 1.8% increase. The core CPI print also beat expectations by coming in at 1.7% versus the consensus estimate of 1.6%. The positive initial jobless claims data released by the Department of Labor also contributed to the brief rally.
The release of Canada’s new housing price index by Statistics Canada might have contributed to the immediate pullback. The loonie has been stronger against the greenback since yesterday due to the rising global crude oil prices, as tracked by the West Texas Intermediate. The higher oil prices hindered the currency pair’s rally yesterday as well as today.
The currency pair’s future performance is likely to be affected by the release of Canadian existing home sales data and US advance retail sales data, both scheduled for tomorrow.
The USD/CAD currency pair was trading at 1.2202 as at 15:49 GMT having dropped from a high of 1.2239. The CAD/JPY currency pair was trading at 90.68 having dropped from a high of 91.01.
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