Firm inflation data smashes anticipations of rate hike
Daily Currency Update
The USD/CAD pair showed a lack of direction trading in the 1.3600-1.3700 range ahead of the speech from US Federal Reserve Chairman Jerome Powell tomorrow. West Texas Intermediate (WTI) oil traded near $88 and may break above $90 if tensions continue to build in the Middle East. Canada’s monthly headline and core Consumer Price Index (CPI) contracted by 0.1% while financiers forecasted a 0.1% growth. The annual headline and core CPI softened to 3.8% and 2.8% respectively. A dim Canada inflation report has dented hopes of one more interest rate increase from the Bank of Canada (BoC).Key Movers
The USD was on a seesaw this morning as the situation in the Middle East grows less certain. Meanwhile local macroeconomic numbers have been starting to lose their strength and point to the possible start of a recession for the US. The USD has moved in tight ranges today and is heading lower when tracked by the US dollar index (DXY) for a third day in a row. Federal Reserve board member Christopher Waller and the New York Fed’s John Williams are scheduled to speak today along with Fed Governor Michelle Bowman’s remarks which will follow.The euro traded on the defensive end against the US dollar. The EUR/USD pair has lost some momentum and slipped back to the 1.0550 range. Final Eurozone inflation figures were released to show a match with the preliminary readings.
The GBP attempted a recovery as the UK’s inflation report turned out stickier than anticipated. UK’s headline and core inflation landed higher than expectations at 6.7% and 6.1% respectively.
Expected Ranges
- EUR/CAD: 1.4389 - 1.4438 ▼
- GBP/CAD: 1.66 - 1.6664 ▼
- AUD/CAD: 0.8671 - 0.8709 ▼
- USD/CAD: 1.3623 - 1.367 ▼