USD/CAD Sinks as Canada CPI Beats Expectations

Talking Points

• Canada June Consumer Price Index Rises 2.4% y/y vs 2.3% expected
• Canada Wholesale Trade Sales Rose 2.2% in May vs 0.6% expected
• Canadian Dollar Rises Against US Dollar on Positive Outcomes

The Canadian Dollar rose remarkably against the US Dollar as Canada’s headline inflation rate reported at 2.4 percent, trumping estimates calling for a 2.3 percent increase. This outcome marks the fast pace of inflation in more than two years. Canada’s core inflation came in at 1.8 percent, and beating expectations calling for a print of 1.7 percent.

The inflation report comes just two days after Bank of Canada Governor Poloz decided to keep its headline rate unchanged at 1 percent. He mentioned in his policy announcement two days ago that gains in prices are not tied to the broad economy. The central bank is now neutral about the policy rate move.

Story: USD/CAD Trades into March High Trendline as BoC Talks Down Economy

The US Dollar fell against the Candian Loonie as it faced trend-line resistance before the release.

USD/CAD 5-Minute Chart using FXCM Marketscope 2.0

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to [email protected].

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