Search ForexCrunch

Inflation in Canada is  lifting its head: CPI is up 0.1% m/m and 2.4% y/y. Core COI is up 0.3% and  2.3% y/y. This is a beat. While a rate hike is not on the cards, the BOC could change its stance.

USD/CAD is trading lower, getting closer to 1.12. Update: the pair is dipping below this line.

Further support awaits at 1.1111 which is 0.90 on CAD/USD. Resistance is at 1.1250, which was pierced through with a lot of momentum. See the Canadian  $ forecast for more.

Canada was expected to report a  drop of 0.3% in CPI and a rise of 0.2% in Core CPI, month over month. Year over year, a rise of 2.1% was expected in headline inflation and 2.2% in core inflation.

USD/CAD traded around 1.1255 before the release, already down from around 1.13.

The Canadian dollar already got a boost earlier from the Chinese announcement on a rate cut. This helped all commodity currencies.

The Bank of Canada recently made a subtle change to its neutral stance, basically accepting that the picture of inflation has changed.

Here is how it looks on the  30 minute chart. The pair extends its falls.

USDCAD falling on strong Canadian inflation data loonie is strong November 21 2014