CAD dips against most major currencies following BoC rate decision

Key Movers

The US Dollar Index (DXY) maintained its strength this morning to trade near the 105.33 range. Unemployment Claims data in the US was released, showing a drop of 11,000 claims for last week. This shows US layoffs were lower the week of April 6th, but the labour market remained tight. The Producer Price Index (PPI) data was also released, showing a rise by 2.1% for the 12-month period ending in March. This was the largest increase since rising 2.3% in April 2023. This PPI spike indicated persistent hot inflation in the US. This also seemed to contribute to the general market sentiment that the US Federal Reserve will likely keep rates higher for longer.

In Eurozone news, the European Central Bank (ECB) held interest rates flat at 4.5% this morning, noting that “it would be appropriate to reduce the current level of monetary policy restriction” if inflation continues to move toward the 2% target. This and other comments leaned towards a more dovish ECB with rate cuts expected in the future.

China reported their Consumer Price Index (CPI) last night, with a 0.1% year-over-year increase after reporting 0.7% growth in February. This came in below the expected 0.4% increase indicating the Chinese economy remained weak when it came to inflation.