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CAD slips ahead of US inflation data

Monday 10 January, 2022

Daily Currency Update

The Canadian dollar slipped against the US dollar on Monday as oil prices fell and some analysts predicted that this week's CPI data release could make the case for the US Federal Reserve to raise interest rates sooner than expected, boosting demand for USD. Headline inflation in the US is expected to come in at 7% year-on-year on Wednesday. Fed Funds futures contracts now expect the chances of a 25bp US interest rate hike at the January 26th meeting to be around 85% – compared to 65% at the start of this year. An interest rate hike could bring some support to the US dollar. USDCAD was up 0.31% at around 1.26795 at the time of writing.

Key Movers

The pound and the euro experienced some downward pressure against the strengthening dollar on Monday. GBPUSD was down 0.18% at around 1.3567 while EURUSD was down 0.26 at around 1.13320 at the time of writing. But there could be good news for the pound soon as the UK GDP report for November is set to be released tomorrow. It has a predicted release of 0.4% growth, which analysts take as a positive sign for the UK economy and keep expectations alive for a further  rate hike in early February.

Expected Ranges

  • EUR/CAD: 1.4287 - 1.437 ▲
  • GBP/CAD: 1.7142 - 1.7206 ▲
  • AUD/CAD: 0.9068 - 0.9101 ▲
  • USD/CAD: 1.2611 - 1.2689 ▲