The Canadian dollar today rallied against the US dollar despite the release of weak Canadian inflation data in the early American session. The USD/CAD currency pair started reversing its earlier gains and extended its losses on the back of negative investor sentiment towards the US dollar.
The USD/CAD currency pair today dropped from a high of 1.3483 in the early European session to hit a low of 1.3415 in the American session.
The currency pair was in a consolidative phase during the Asian session before rallying higher in the early European session. However, the rally was not sustained as a slight rebound in global oil prices as tracked by the West Texas Intermediate, which hit a high 48.00 earlier today, also boosted the loonie triggering the reversal. The release of the Canadian CPI data for November by Statistics Canada triggered a brief rally by the pair before it headed lower. The headline CPI data came in at an annualized 1.7% missing expectations by 0.1%, while the core CPI print was in-line with expectations by coming in at 1.9%.
The pair’s decline was not due to the loonie being much stronger than the greenback, but rather was caused by negative investor sentiment towards the US dollar ahead of the Fed interest rate decision.
The pair’s short-term performance is likely to be greatly influenced by the FOMC monetary policy decision and its policy statement scheduled for 18:30 GMT.
The USD/CAD currency pair was trading at 1.3422 as at 16:26 GMT having dropped from a high of 1.3483. The CAD/JPY currency pair was trading at 83.58 having rallied from a low of 83.33.
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