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Loonie dips following lower-than-expected CPI data

Weston Blystone
Written by
Weston Blystone

Weston Blystone

OFXpert

At OFX, Weston collaborates closely with businesses, guiding them and providing invaluable insights into foreign exchange strategies to mitigate risk effectively.

| Tuesday 16 April, 2024

Daily Currency Update

The Loonie dipped this morning against some major currencies including the EUR, USD, and GBP. This came on the back of lower-than-expected Consumer Price Index (CPI) inflation data. Monthly CPI data was at 0.6% instead of the anticipated 0.7% level. Median CPI year-over-year was also lower than expected at 2.8% versus 3%. Yearly Trimmed CPI data, which excludes the most volatile 40% of items, was also lower than expected at 3.1% versus the expected 3.2%. This lower-than-expected CPI data and the resulting drop in the Canadian dollar may give the Bank of Canada (BoC) justification to hold interest rates or lower them in the future. BOC Governor Tiff Macklem is set to speak later today to provide more insight.

Key Movers

The US Dollar Index (DXY) continued to hold strong this morning, up around 0.05% to trade near 106.26. The DXY strength continued even amidst poor building Permits data which came in lower than expected at 1.46 million, compared to the expected 1.51 million. Building Permits data shows how much new privately-owned residential construction is taking place. Meanwhile, Industrial Production data month-over-month came in as expected at 0.4%.

Trade balance data was released in the Eurozone which shows the difference between the value of exports and imports. The trade balance data came in lower than expected at 17.9 billion versus the expected 27.3 billion. Despite this low data, the euro was up against the CAD this morning.

In UK news, the GBP Claimant Count Change, which shows the change in the number of people claiming unemployment-related benefits, came in lower than expected at 10,900 versus the anticipated 17,200. Conversely, the GBP Average Earnings Index for 3 months out of the year, came in higher than expected at 5.6% instead of the 5.5% that was expected.

Expected Ranges

  • EUR/CAD: 1.4636 – 1.4729 ▲
  • GBP/CAD: 1.7133 – 1.7240 ▲
  • AUD/CAD: 0.8834 – 0.8884 ▼
  • USD/CAD: 1.3770 – 1.3846 ▲

Written by

Weston Blystone

OFXpert

Weston is on a mission to help people optimise their foreign exchange transfers. As Corporate Client Associate at OFX, he collaborates closely with businesses, guiding them and providing invaluable insights into foreign exchange strategies to mitigate risk effectively. Always eager to deepen his understanding and share his expertise with others, Weston finds great fulfilment in working with diverse individuals, nurturing their company’s growth through tailored solutions.

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