CAD makes gains as inflation abates
Tuesday 17 January, 2023
Daily Currency UpdateThe Canadian dollar is looking up at the start of the session as inflation in Canada dropped more than expected in December. Headline inflation came in at 6.3%, lower than the 6.4% consensus. This reinforced the expectation that the Bank of Canada will raise rates by only 0.25% at their next meeting and that this could be the last hike of the cycle.
Key MoversUS markets are heading towards a lower open with futures trading down but commodities are up with Oil breaching the $80 a barrel mark. This has the USD losing ground against most majors. There is no major data today but tomorrow we will have a better line of sight into US inflation with the release of the Producer Prices and Retail Sales reports. The Aussie dollar was helped by a stronger than expected GDP release from China. Year-over-year GDP in China was up 2.9% for the 4th quarter, up from an expected 1.6%. This caused the AUD to make gains due to expectations that supplies of raw materials to China will be up as well. The Euro is holding ground against the Greenback today after economic sentiment in Germany rebounded overnight going from a -15.0 last month to a +16.9. The GBP is also up against the USD after jobs data in the UK shows unemployment staying at a low of 3.7%.
- EUR/CAD: 1.4478 - 1.4555 ▲
- GBP/CAD: 1.6324 - 1.6455 ▲
- AUD/CAD: 0.9308 - 0.9347 ▼
- USD/CAD: 1.3363 - 1.3435 ▼