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The Loonie weakens following inflation numbers

CAD - Canadian Dollar

The Loonie decreased following the release of the consumer price index, which rose 2 percent on a year-over-year basis in April, after a 1.9 percent increase in March. According to Statistics Canada, seven of the eight major components were up year over year in April. The headline index rose by 0.4 percent on a surge in gasoline prices, which was only partly attributable to seasonal factors. Furthermore, the existing home sales month to month in April came in at 3.6 percent versus the forecast of 1.8 percent and a previous read of 0.9 percent.

However, it seems that trade tensions between the US and China are the main factors causing the Loonie's weakness. The crude oil outlook was trading without change amid tensions in the Middle East risking supply on one hand and trade war hurting demand on the other.

Technically speaking, the USD/CAD pair continues to trade in a range, extending its trading area range from 1.3375 to 1.3515 for three weeks. Once the USD/CAD pair goes outside that range, it might pick a clear direction.

Key Movers

The Australian dollar fell to its lowest level in three months, trading at 0.6915 at four in the morning as bleak data from China heightened worries about the global economy, while anemic domestic wage growth figures also dragged. For instance, industrial output and retail sales decelerate more than economists had forecasted.

The North American equity futures and European shares have plummeted as the weak data from China activated global growth concerns. Additionally, regarding Brexit, it seems that Prime Minister Theresa May is going to have another Brexit showdown and she is promising to bring her deal back to Parliament at the start of June.

Expected Ranges

USD/CAD: 1.3375 - 1.3515 ▲

EUR/CAD: 1.5062 - 1.5150 ▲

GBP/CAD: 1.7277 - 1.7388 ▼

AUD/CAD: 0.9318 - 0.9373 ▼

NZD/CAD: 0.8808 - 0.8860 ▼