Canada reported a drop of 0.2% in prices m/m in October, worse than 0.1% expected. Core CPI rose by only 0.2%, worse than 0.3% predicted. Year over year, headline CPI is at 1%, worse than 1.1% predicted and only Core CPI y/y came out at 2.1% as expected.
USD/CAD climbed above 1.31 in the immediate aftermath. Update: the move is extending with Dollar/CAD rising above 1.3122. Resistance awaits at 1.3160. It is important to note that the US dollar is now raging across the board.
Canada was expected to report a y/y rise of 1.1% in headline CPI for September, lower than 1.3% in August. Core CPI, which is followed more closely by the BOC, was expected to remain stable at 2.1%.
USD/CAD traded around the battle line of 1.3070.
It is quite an eventful week for the Canadian dollar. The change of guard in politics, with the election of the Liberal Party led by Trudeau and the ousting of Harper had a short lived impact.
The fall in the price of oil and the lowering of growth forecasts from the Bank of Canada already took a bigger toll and the correction seen in USD/CAD was reversed. It seems that the fall of the loonie, and the uptrend in USD/CAD has resumed.
More:
- USD/CAD: Inverted H&S Pattern; Levels & Targets – SocGen
- Get Ready to buy USD/CAD targeting 1.38 – BNP Paribas
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