CAD - Canadian Dollar
Since the Bank of Canada signalled a hawkish tone in April, investors have favoured CAD to USD, pushing down USDCAD to a six-year low. USDCAD was down 0.02% this morning at 1.212.
Investors bet that the Bank of Canada would be more attentive to a surge in inflation that the US Federal Reserve. This, along with higher oil prices and strong commodity markets, have bolstered demand for the Canadian dollar.
The euro held steady against the pound yesterday showing resilience despite a stronger US dollar, after the European Commission raised its growth forecasts for the bloc. EURUSD was up 0.1% at 1.207 this morning. The eurozone economy is expected to expand by 4.3% this year, which is revised up significantly from 3.8% growth previously forecasted.
The Australian dollar extended its losses today following the mammoth increase in US inflation data. AUDUSD was down 0.2% at 0.7707 in early trading. Should prices continue to rise prompting a monetary policy amendment by the US Federal Reserve, the outlook for the AUD could begin to turn bearish. We continue to watch inflation markers as the key driver of currency market direction.
The US dollar rose slightly above two-month lows yesterday, as some investors anticipate the higher than expected inflation report could force the US Federal Reserve to tighten monetary policy sooner than planned. The US Dollar Index, which measures USD strength against a basket of major currencies, was up 0.3% at 90.710 this morning.
1.458 - 1.458 ▲GBP/CAD:
1.701 - 1.707 ▼AUD/CAD:
0.934 - 0.938 ▲USD/CAD:
1.206 - 1.215 ▼