USD/CAD climbs above 1.3800 after mix Canadian Inflation data


  • USD/CAD rises to 1.3820 as mixed Canadian inflation report keeps BoC rate cut hopes firm.
  • BoC’s preferred inflation gauge softens to 2.0% on a year-on-year basis.
  • The US Dollar hovers near a six-month high as the Fed is expected to delay rate cut plans.

The USD/CAD pair jumps to 1.3820 in Tuesday’s early New York session after Statistics Canada reported a mixed Consumer Price Index (CPI) report for March. The agency showed that monthly headline CPI grew by 0.6%, slower from expectations of 0.7% but higher than the prior reading of 0.3%. However, the annual headline inflation data accelerated to 2.9% from the prior reading of 2.8%.

The monthly Bank of Canada (BoC) CPI core data, which excludes eight volatile items, rose sharply by 0.5% compared to a meagre 0.1% growth in February. However, the annual core CPI slowed to 2% from the prior reading of 2.1%.

The return of the BoC’s most preferred inflation measure to a desired rate of 2% is expected to allow the Bank of Canada (BoC) to start reducing interest rates, which are currently expected from the June policy meeting.

Last week, BoC Governor Tiff Macklem said a rate cut in June is possible if inflation continues to decelerate sustainably after the BoC keeps interest rates unchanged at 5%. The BoC has kept interest rates steady at 5% since July 2023 to maintain downward pressure on consumer price inflation.

Meanwhile, significant demand for safe-haven assets due to worsening geopolitical tensions and faded speculation for Federal Reserve (Fed) rate cuts for the June and July policy meetings have built pressure on the Canadian Dollar.

The US Dollar Index (DXY) falls slightly from a five-month high of 106.44. The near-term demand for the US Dollar remains intact as investors see the Fed keeping interest rates higher for a longer period. Inflation remaining higher than expectations for three months in a row suggests that there should be no urgency for rate cuts.

USD/CAD

Overview
Today last price 1.3808
Today Daily Change 0.0020
Today Daily Change % 0.15
Today daily open 1.3788
 
Trends
Daily SMA20 1.3594
Daily SMA50 1.3544
Daily SMA100 1.3486
Daily SMA200 1.3517
 
Levels
Previous Daily High 1.3794
Previous Daily Low 1.3725
Previous Weekly High 1.3787
Previous Weekly Low 1.3547
Previous Monthly High 1.3614
Previous Monthly Low 1.342
Daily Fibonacci 38.2% 1.3767
Daily Fibonacci 61.8% 1.3751
Daily Pivot Point S1 1.3744
Daily Pivot Point S2 1.3701
Daily Pivot Point S3 1.3676
Daily Pivot Point R1 1.3813
Daily Pivot Point R2 1.3837
Daily Pivot Point R3 1.3881

 

 

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