The USD/CAD is trading 0.30 percent higher this morning (weaker Loonie), around the 1.3300 handle, but it is still trading within the rangebound of 140 pips (1.3180 and 1.3320), as has occurred over the last two weeks. The Canadian Loonie failed to gain the upper hand due to weak crude oil price action in the overnight trading session with cautious investor sentiment from European markets.
The pace of Canadian prices increases accelerated unexpectedly in December. This is a development that could reinforce the central bank’s view that more rate increases may still be necessary this year. The CPI rose 2 percent year to year. Lower energy prices were offset by higher prices for various services, including air transportation, telephone services, and travel tours. Excluding gasoline, the CPI rose 2.5 percent in December.