The Canadian dollar today rallied massively against its US counterpart after Canada’s CPI print for November was recorded at the highest level since January. The loonie’s rally against the greenback was also boosted by the release of third quarter US GDP growth data, which missed expectations.
The USD/CAD currency pair lost over 100 points after the US and Canadian releases to drop from a daily high of 1.2840 to a low of 1.2719.
The release of Canada’s annual inflation by Statistics Canada as tracked by the CPI was the main trigger behind the loonie’s rally. The CPI print came in at an annualized rate of 2.1% in November beating the market expectation of a 2.0% inflation rate. The CPI data recorded a monthly increase of 0.3% versus the consensus estimate of 0.2%. The release of upbeat Canadian retail sales data for October also boosted the loonie. The retail sales posted a 2.5% increase in October, which was higher than the previous 0.2% increase and the expected 0.3% print.
The release of the US GDP data for the third quarter by the Bureau of Economic Analysis contributed significantly to the greenback’s weakness against the loonie. The third quarter GDP data came in at an annualized rate of 3.2%, which was lower than the expected 3.3%. The initial jobless claims data released by the Department of Labor also missed expectations by coming in at 245,000.
The currency pair’s future performance is likely to be affected by the release of Canadian GDP data and US durable goods orders data, among other economic releases scheduled for tomorrow.
The USD/CAD currency pair was trading at 1.2734 as at 15:48 GMT having retraced some of its losses from a low of 1.2719. The CAD/JPY currency pair was trading at 89.10 having rallied from a low of 88.25.
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