TheÂ Canadian dollar today dropped significantly against theÂ US dollar following theÂ release ofÂ disappointing Canadian CPI data inÂ theÂ early American session. TheÂ loonie’s losses were further compounded byÂ theÂ stronger US dollar, which was boosted byÂ rising US Treasury yields.
TheÂ USD/CAD currency pair today rallied from aÂ low ofÂ 1.2787 toÂ aÂ high ofÂ 1.2909 gaining over 120 points inÂ theÂ early American session.
TheÂ loonie was initially stronger than theÂ greenback during theÂ Asian session largely boosted byÂ higher crude oil prices asÂ tracked byÂ theÂ West Texas Intermediate. However, theÂ loonie’s massive decline was triggered byÂ theÂ release ofÂ theÂ Canadian CPI data forÂ April byÂ Statistics Canada. TheÂ core CPI print increased byÂ 0.1%, while headline CPI grew byÂ 0.3% translating into anÂ annualized 2.2%; both CPI prints missed expectations. TheÂ headline Canadian retail sales data forÂ March grew byÂ 0.6% beating expectations, but could not stop theÂ loonie’s decline. TheÂ core retail sales contributed toÂ theÂ decline asÂ it contracted byÂ 0.2% instead ofÂ theÂ expected 0.5% expansion.
TheÂ greenback’s rally asÂ evidenced byÂ theÂ US Dollar Index, which hit aÂ multi-week high ofÂ 93.83 today further contributed toÂ theÂ currency pair’s rally. TheÂ US dollar is getting stronger byÂ theÂ day boosted byÂ theÂ rally inÂ 10-year US Treasury yields, which hit aÂ high ofÂ 3.13% today.
TheÂ currency pair’s future performance is likely toÂ be affected byÂ political events inÂ theÂ USA andÂ Canada such asÂ theÂ NAFTA deal given theÂ upcoming weekend.
TheÂ USD/CAD currency pair was trading atÂ 1.2898 asÂ atÂ 14:33 GMT having risen from aÂ low ofÂ 1.2787 earlier today. TheÂ CAD/JPY currency pair was trading atÂ 85.86 having dropped from aÂ high ofÂ 86.73.
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