USD/CAD prints a fresh weekly low below 1.2320 due to Canada’s high inflation reading

The USD/CAD slides to fresh weekly lows during the New York session, down 0.24%, trading at 1.2326 at the time of writing. Despite the Federal Reserve bond taper announcement in November’s meeting and higher energy prices, the market sentiment is upbeat, boosted by robust US third-quarter corporate earnings.

The Dow Jones, the S&P 500, and the Nasdaq rise between 0.10% and 0.50%, whereas the CBOE Volatility Index (VIX), also known as the “fear index,” slid to 15.7, near the lowest since February 2020, spurring the stocks rally in the week. 

In the meantime, the US Dollar Index, which measures the buck’s performance against a basket of its peers, slumps 0.15%, sits at 93.64. On the contrary, the US 10-year Treasury yield, rises one basis point, is currently at 1.635%, failing to boost the greenback.

High crude oil  prices boost the CAD

Western Texas Intermediate (WTI), the US crude oil benchmark, is rising almost half percent, trading at $82.80 per barrel, weighing on the USD/CAD pair, as depicted by the 0.24% fall.

On the macroeconomic front, the US economic docket featured the EIA Crude Oil Stocks change for the week ending in October the 15. Inventories slump by 0.4 million barrels, spurring a slight jump in WTI prices.

As data published by Statistics Canada, the Canadian economic docket unveiled the Consumer Price Index (CPI) for September, which rose by 4.4% from 4.1% in August. Meanwhile, the Bank of Canada (BoC) Core CPI, excluding food and energy, increased by 3.7%, higher than the 3.6%.

Analysts at Scotiabank expect eight rate hikes by the end of 2023

According to analysts at Scotiabank, they expect eight Bank of Canada rate hikes by the end of 2023, starting on July 2022. The forecast came after Canada’s inflation was reported, which is the highest reading since February 2003.