CAD stutters on amid lower-than-expected oil draw

Key Movers

The euro was seen slacking against the USD, trading below the 1.1200 level. Inflation data released in the Eurozone revealed that the core inflation quickened more than the market’s expectations in June. Data showed that the Consumer Price Index (CPI) rose 5.5% year-over-year in June against the market expectations of a 5.4% bump. Markets are anticipating another rate hike by the European Central Bank (ECB) in its upcoming policy meeting in July, however, ECB officials have sounded less hawkish on the prospects of more hikes after summer.

In the UK the inflation cooled down more than anticipated in June. The numbers came in at 7.9% annually, which is the slowest in more than a year. The sterling slipped swiftly near the 1.2900 level against the USD after the data release. Adding to this, Lloyds Bank survey revealed that food inflation is anticipated to soften as producers have cut prices for the first time in more than three years as cost pressures have relented. Markets are expecting the Bank of England BoE may increase interest rates further by 100 bps this year, implying an interest rate peak at around 6.5%. This is in line with UK Prime Minister Rishi Sunak’s promise of halving inflation by the year-end ahead of a probable election in 2024.

West Texas Intermediate (WTI) oil has crossed the 75 mark and was last seen trading at 76.50 levels. Oil prices are expected to return to its upside journey as the inflationary pressures in the United States economy have started easing.