Home Daily Commentaries CAD climbs after US inflation report

CAD climbs after US inflation report

Daily Currency Update

Demand for the Canadian dollar climbed against the US dollar after data showed that US consumer prices rose again last month. Annual CPI rose to 7% in December, which was in line with economist expectations. Controlling price pressures is now a key mandate for the Federal Reserve and this robust print makes a stronger case for the central bank to hike interest in March. A strong inflation reading would typically help boost demand for USD, however some analysts attribute today's selloff to the fact that many investors have already priced in sooner-than-expected rate hikes from the Fed. The Canadian dollar also benefited from oil prices gaining as US crude stockpiles dropped to its lowest since 2018. USDCAD was down 0.55% at around 1.25020 at the time of writing.

Key Movers

EURUSD extended its rally in early morning trading, largely helped by USD weakness across the board. The pair was trading at 1.14285 at the time of writing. GBPUSD also climbed as expectations for a potential interest rate hike from the Bank of England increased recently. Despite record COVID-19 cases in the UK, the government has maintained that it would keep the economy open which has been a positive for the pound. GBPUSD was sitting at 1.3697 at the time of writing.

Expected Ranges

  • EUR/CAD: 1.4239 - 1.4319 ▼
  • GBP/CAD: 1.7085 - 1.7162 ▼
  • AUD/CAD: 0.9039 - 0.9103 ▲
  • USD/CAD: 1.2503 - 1.2605 ▼