CAD demand picks up with hotter than expected CPI data
Daily Currency Update
The Canadian dollar has picked up on the day amid the release of stronger-than-expected inflation data. Canadian Consumer Price Index (CPI) data comes in at 3.3%, an increase over the previous month’s CPI of 2.8%. The mortgage interest cost index remains the largest contributor to headline inflation in Canada, being up over 30%. The CPI data excluding this index sits near 2.4%.Key Movers
The US dollar index (DXY) is currently down on the day at -0.2% amid mixed data releases out of the US including strong retail sales and very weak manufacturing data. Retail sales data is stronger than expected at 0.7% versus the expected 0.4% rise. On the other hand, the US Empire State manufacturing index reports a decline of 20 points to 19.0 versus the expected -0.9 drop.The German Zentrum für Europäische Wirtschaftsforschung (ZEW) Economic Sentiment Index is improving this month at -12.3 versus the expected -14.4. While the sentiment is still negative, this shows a positive outlook from economic analysts in Germany.
In UK news, the unemployment rate has increased to 4.2% for the quarter, over the forecasted 4%. UK employment experienced a decrease of 66,000 workers, a vast difference from the expected increase of 75,000 workers. This depicts a struggling labor market for the UK.
Retail sales data out of China shows a fall to 2.5%, down from 3.1% in June. Chinese unemployment rose from 5.2% in June to 5.3% in July. Both data reports suggest a struggling market.
Expected Ranges
- EUR/CAD: 1.46684 - 1.47604 ▲
- GBP/CAD: 1.70536 - 1.71645 ▲
- AUD/CAD: 0.87050 - 0.87646 ▼
- USD/CAD: 1.34392 - 1.35005 ▲