- Annual CPI in Canada stays unchanged at 2% in July vs 1.7% expected.
- FOMC minutes show couple of policymakers favoured a 50 bp cut.
- WTI settles at $55.68, erases 0.8% on Wednesday.
The USD/CAD pair dropped to a daily low of 1.3253 in the early trading hours of the American session after Statistics Canada released its inflation report. Although the pair lost its bearish momentum in the remainder of the session, it remains on track to close the day in the negative territory. As of writing, the pair was down 0.22% on the day at 1.3285.
CPI data lifts CAD on Wednesday
The Consumer Price Index (CPI) in July remained unchanged at 2% on a yearly basis in July and came in higher than the market expectation of 1.7%. More importantly, this data suggested that the Bank of Canada could refrain from cutting its policy rate and provided a boost to the Loonie.
Commenting on the data, however, TD Securities analysts argued that the Bank of Canada (BoC) could look through the upside surprise partly due to the fact that the challenges confronting the Canadian economy are external in nature.
"If the global economy slows markedly, the Bank of Canada will be forced to provide stimulus even with buoyant mid-year price pressures," analysts said.
Meanwhile, after rising to a weekly high of $57.43 earlier in the day, the barrel of West Texas Intermediate reversed its direction and settled 0.8% lower to make it difficult for the commodity-related CAD to continue to gather strength against its American counterpart.
On the other hand, the minutes of the FOMC's July 30-31 meeting today revealed that a couple of policymakers favoured a 50 basis point rate cut but also said that most policymakers viewed the decision to cut the policy rate by 25 basis point as a 'recalibration' of the policy stance. The US Dollar Index is now looking to close the day in the positive territory.
Technical levels to watch for
|Today last price||1.3289|
|Today Daily Change||-0.0029|
|Today Daily Change %||-0.22|
|Today daily open||1.3318|
|Previous Daily High||1.3346|
|Previous Daily Low||1.3308|
|Previous Weekly High||1.334|
|Previous Weekly Low||1.3184|
|Previous Monthly High||1.3215|
|Previous Monthly Low||1.3016|
|Daily Fibonacci 38.2%||1.3323|
|Daily Fibonacci 61.8%||1.3332|
|Daily Pivot Point S1||1.3302|
|Daily Pivot Point S2||1.3287|
|Daily Pivot Point S3||1.3265|
|Daily Pivot Point R1||1.334|
|Daily Pivot Point R2||1.3362|
|Daily Pivot Point R3||1.3378|
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