USD/CAD sinks like a stone after US CPI data miss
- The Canadian Dollar is breaking out on the back of a soft US CPI report.
- The bears have eyes on 1.3380 as a possible last defence for a much deeper correction vs. the US Dollar.
The Canadian Dollar, which had already been picking up a bid prior to the North American day, rallied hard on the back of the US Consumer Price Index that missed market expectations to the downside. At the time of writing, USD/CAD is trading at 1.3555, down 0.56% on the day after falling from a high of 1.3644 to a low of 1.3520 so far.
US CPI missed the mark
- US CPI MoM Nov: 0.1% (est 0.3%, prev 0.4%).
- US CPI Ex Food And Energy MoM Nov: 0.2% (est 0.3%, prev 0.3%).
- US CPI YoY Nov: 7.1% (est 7.3%, prev 7.7%).
- US CPI Ex Food And Energy YoY Nov: 6.0% (est 6.1%, prev 6.3%).
The Consumer Price Index has led to the markets pricing the terminal Fed rate down to 4.86% vs 4.98% prior to the report. Consequently, US stocks on Wall Street have opened bid in the cash market with the NASDAQ jumping over 400 points and rallying over 3.3%. The Canadian Dollar is risk-sensitive, belonging to the commodity complex, and the prospects of a pivot at the Fed are fuelling the bid with the CRB index up some 1% on the data.
USD/CAD technical analysis
The Canadian Dollar is breaking out and while below 1.3560, the bears will have their eyes set on 1.3380 as a possible last defence for a much deeper correction vs. the US Dollar.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
