News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
USDCAD Continues to Point Lower as Canadian Inflation Data Comes in Hot

USDCAD Continues to Point Lower as Canadian Inflation Data Comes in Hot

Brendan Fagan,

Canadian CPI, Inflation, Bank of Canada, USDCAD – Talking Points

  • CANADIAN CPI YoY: ACTUAL 6.7% (FORECAST 6.1%, PREVIOUS 5.7%)
  • CANADIAN CPI MoM: ACTUAL 1.4% (FORECAST 0.9%, PREVIOUS 1.0%)
  • USDCAD initially spiked lower to 1.2510 before recovering

Canadian inflation data for March came in much hotter than expected, as advanced economies continue to struggle with extremely sticky price pressures. Annual CPI jumped to 6.7%, much higher than the expected print of 6.1%. Core inflation data also came in much hotter than expected, with Core CPI up to 5.5% in March, up from 4.8% in February. This makes the March inflation print the highest since January 1991, when CPI reached 6.9%.

The hot print will likely reaffirm the Bank of Canada’s (BoC) aggressive path towards policy normalization. The BoC raised rates by 50 basis points last week while also revealing an aggressive quantitative tightening scheme. In that policy statement, the BoC stated that they expect inflation to average roughly 6% for the first half of 2022. Today’s CPI print may push the market to price in a more aggressive Bank of Canada, with the next policy meeting scheduled for June 1.

USDCAD 1 Hour Chart

USDCAD Continues to Point Lower as Canadian Inflation Data Comes in Hot

Chart created with TradingView

Following the report, USDCAD initially spiked lower to fresh session lows before retracing that move. The pair remains pointed lower, with Loonie strength reinforced by recent gains in oil. USDCAD has now entered a zone below 1.2540 that has offered support for much of April. Should this area hold yet again, the 1.2600 threshold may come into focus quickly. However a break lower may usher in a cascade down to the 1.2500 area, where price consolidated around the turn of the month.

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

--- Written by Brendan Fagan, Intern

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES