Canada’s Inflation Picks Up Lifting The Loonie

OctaFx Analyst Team OctaFX

The Japanese Yen strengthened against the US dollar following a government report that showed an increased rate of inflation. The report showed that the country’s national CPI grew at an annualized rate of 1.4% against the expected 1.3%. The monthly CPI grew at 0.9%, which was higher than the expected 0.8%. The inflation surge was attributed to increased electricity and gasoline costs. The increased rate of inflation increased chances that the BOJ would start normalizing interest rates.

The EUR/USD pair moved sideways following the release of Germany’s Gross Domestic Product (GDP) and EU inflation numbers. Data from Germany showed that the annualized and monthly GDP remained unchanged at 2.3% and 0.3% respectively. Similarly, the EU data showed that the core CPI remained unchanged at 1.0%. As of writing, the pair was down 28 basis points to trade at 1.2295.

Yesterday, we wrote that today would be an important day for the loonie, which has been falling for two months. Today, Canada released inflation data that beat analysts’ forecast. The data showed that the CPI grew at an annualized rate of 1.7% compared to analysts’ estimates of 1.6%. January’s CPI rose to 0.7% compared to analysts’ forecast of 0.4%.

USD/JPY

The USD/JPY pair is trading at 106.79 following the release of Japanese economic data. Today, the pair has fallen from a high of 107.12. The pair could continue moving down to test the support level of 106.58.

USD/CAD

The loonie rose against the dollar after the government agency released inflation data. The USD/CAD pair fell to a low of 1.2611, which is below the 200-day moving average. The price is also below the support level the pair had established for about two weeks. Could this be the news the Canadian dollar was waiting for? Potentially. Traders should now watch out for the 1.2567 level, which is the 61.8% Fibonacci Retracement level.

EUR/USD

The EUR/USD traded sideways today following the release of EU data that was in line with analysts’ forecasts. The pair is currently trading at 1.2303 which is also its 200, 50, and 14-day moving averages. With the RSI being neutral at 50, there is a possibility the pair could move in either direction.

Author

OctaFx Analyst Team

OctaFX

OctaFX is a market-leading forex broker, providing personalised forex brokerage services to customers in over 100 countries worldwide.

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