Inflation at highest level in almost two decades
Wednesday 15 September, 2021
Daily Currency Update
CAD - Canadian Dollar
The Canadian dollar strengthened against the US dollar after data showed that Canada’s annual inflation rate rose to 4.1% in August, the highest level in 18 years. Economists were only expecting a 3.9% annual gain. This acceleration was boosted by increased gasoline prices and new home prices, according to Statistics Canada. USDCAD was down 0.35%, trading at 1.2645 at the time of writing.
Key MoversUK inflation data was posted on Wednesday morning and was the highest reading since March 2012. The year-on-year inflation figure climbed from 2% to 3.2%. This was largely attributed to the 2020 Eat Out to Help Out scheme implemented by the government. The pound climbed 0.22% against the dollar after the data, trading around 1.3836 at the time of writing.
The Australian dollar was the weakest of major currencies through trade on Tuesday, giving up 0.7% amid dovish commentary from RBA Governor Philip Lowe and a broader risk off tone. While maintaining an expectation the economy will rebound swiftly once lockdowns are removed, Lowe pushed back on market expectations for a rate hike in 2022 and H1 2023. AUDUSD was up 0.09% this morning, trading at 0.7324.
Demand for the US dollar fell across the board after inflation data released on Tuesday missed market expectations. The US Dollar Index was down 0.15%, trading around 92.49 at the time of writing.
- EUR/CAD: 1.4931 - 1.5004 ▼
- GBP/CAD: 1.7486 - 1.7554 ▼
- AUD/CAD: 0.9255 - 0.9297 ▼
- USD/CAD: 1.2637 - 1.2707 ▼