Canadian Inflation Rises to a Decade High
Thursday 19 December, 2019
Daily Currency UpdateCAD - Canadian DollarThe Canadian dollar made gains on its trading counterparts yesterday after CPI data showed inflation had a moderate acceleration due to increased energy prices. Headline inflation rose to 2.2 percent from 1.9 percent. Economists are saying the rise in energy prices YoY was mainly due to the steep drop in last year's energy prices back in November 2018, moving forward, the base effect calculation will be dropped. Other contributing factors to the rise in CPI were healthcare, clothing and footwear, personal care, and tobacco and alcohol. The reading on inflation is its highest in a decade, May of 2009.Crude oil prices topped out overnight at 60.94 dollars per barrel and have since corrected 0.16 percent with WTI now trading at 60.75 dpb. Rising crude oil optimism continues as the United States and China are moving in the right direction to curb their trade war with phase one of the agreement being implemented and additional tariffs sidelined from both sides for the time being. WTI crude is trading above 60 dollars a barrel again this morning ahead of weekly inventories. Crude has seen a lift in pricing as global demand is seen rising through 2020, with trade optimism the main driver.The loonie sees technical support at 1.3114 and 1.3072 and resistance at 1.3157 and 1.3201, the USD/CAD pair opened the North American session at 1.3119.
Key MoversU.S. political noise may play a roll in the greenback's position against its counterparts today. House Speaker Nancy Pelosi and a democratic majority House of Representatives voted and impeached President Donald Trump on two charges, abuse of power and obstructing Congress setting up a Senate Trial, which holds a Republican majority. The trial is currently scheduled for January.Brexit remains at the top of the headlines as fear is returning to a possible no-deal Brexit at the end of next year. Prime Minister Boris Johnson will use his new control of parliament to rule out any extension to the Brexit period beyond 2020. Still, European leaders have said a deadline of December 2020 would be too tight to negotiate a deal, and the proposal could lead to a no-deal outcome.
- USD/CAD: 1.3107 - 1.3127 ▼
- EUR/CAD: 1.4569 - 1.4619 ▼
- GBP/CAD: 1.7083 - 1.7232 ▼
- AUD/CAD: 0.8979 - 0.9029 ▲
- NZD/CAD: 0.8622 - 0.8653 ▲