Can the Canadian dollar keep climbing?
Wednesday 12 May, 2021
Daily Currency UpdateCAD - Canadian DollarHigh demand for the Canadian dollar was little changed this morning after the US dollar saw a slight rebound following higher inflation data. Robust commodity exports, recovering demand for oil and persistent USD weakness has pushed the commodity currency up 5.6% higher against the US dollar over the course of the year. USDCAD was down again this morning, trading at 1.206.Oil prices edged higher yesterday as the US experiences fuel shortages due to an outage at a major pipeline operator after a cyber attack.
Key MoversThe euro was down on the slightly stronger dollar, trading at 1.209 this morning. GBPUSD was only modestly lower this morning, holding steady at the 1.41 mark. This week the pound hit three-month highs against the dollar, driven by easing concerns over another Scottish independence referendum, England’s reopening and the US Federal Reserve indicating its holding steady on interest rates. The Australian dollar tracked sideways through trade yesterday amid rising concern transitory inflation will morph into longer run price pressures. Elevated commodity prices and a shortage of labor supply across the global economy have prompted an uptick across key inflation indicators like PPI and PMI data sets, raising fears central banks will be forced to unwind accommodative policy platforms ahead of a full economic recovery.The US dollar saw a slight rebound after the consumer price index report showed that headline and core inflation rose 4.2% and 3% respectively. The higher than expected inflation figures could pressure the US Federal Reserve to increase rates sooner than expected. Should this happen, we could see a renewed demand for the US dollar.
- EUR/CAD: 1.459 - 1.473 ▼
- GBP/CAD: 1.703 - 1.714 ▼
- AUD/CAD: 0.938 - 0.949 ▼
- USD/CAD: 1.206 - 1.213 ▲