Loonie Dips Intraday on Inflation Data, Recovers to Settle Higher

The Canadian dollar declined intraday as some of Canada’s inflation indicators missed expectations. But the currency rebounded later, ending the Wednesday’s trading session above the opening level.
Statistics Canada reported that the Consumer Price Index rose 0.4% in April from the previous month and 2.0% from a year ago, without adjustments for seasonal variations. That was within expectations. But some of the Bank of Canada preferred measures of core inflation missed forecasts. The common CPI kept steady growth of 1.8% as was expected. But the median CPI slowed its pace of rise from 2.1% to 1.9%, while the trimmed CPI slowed from 2.1% to 2.0%. That is compared to forecasts of an increase by 2.0% and 2.1% respectively.
Helping the loonie was good news about the United States–Mexico–Canada Agreement. US Treasury Secretary Steven Mnuchin said on Wednesday:

I think we are close to an understanding with Mexico and Canada.

As Canada ships the most its goods to the United States, reaching a new trade deal with the USA would be a major boon to the Canadian economy.
USD/CAD was up from 1.3463 to 1.3493 but retreated to 1.3438 by 22:03 GMT today. EUR/CAD traded at 1.5059 after opening at 1.5078 and rising to the daily high of 1.5114. CAD/JPY was at about 81.52, erasing the decline from 81.38 to 80.29.

If you have any questions, comments, or opinions regarding the Canadian Dollar, feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *

three + five =