Canadian Dollar Rallies on Higher Oil Prices and Upbeat CPI Data

The Canadian dollar today rallied against the US dollar driven by higher global crude oil prices as American oil stockpiles fell and tensions with Iran skyrocketed. The USD/CAD currency pair extended its losses as the loonie rallied higher following the release of upbeat Canadian inflation data in the early American session.
The USD/CAD currency pair today fell from an opening high of 1.3318 to a low of 1.3251 after the upbeat inflation report before retracing some of its losses.
The currency pair opened today’s session with a bearish bias as crude oil prices inched higher as tracked by West Texas Intermediate, which hit a high of 57.10. The oil prices were driven higher by the US Secretary of State Mike Pompeo‘s comments against Iran, which raised geopolitical tensions between the two countries. Also, a report by the American Petroleum Institute revealed that their stockpiles had declined. The pair’s decline could also be attributed to a technical pullback given that the currency pair recently hit a monthly high, which could have led some institutional players to take their profits off the table.
The release of the July Canadian consumer price index report by Statistics Canada drove the pair to its daily lows. The monthly CPI print came in at 0.5% beating versus the expected 0.2% translating to an annualized 2.0% versus the expected 1.7% print. The core CPI print also beat expectations by 0.1%.
The currency pair’s future performance is likely to be affected by global crude oil prices, geopolitical events and US maco releases.
The USD/CAD currency pair was trading at 1.3258 as at 13:50 GMT having fallen from a high of 1.3318. The CAD/JPY currency pair was trading at 80.28 having risen from a low of 79.79.

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