Categories: Market Overview

USDCAD falls on strong inflation and could go lower

Canadian consumer inflation rose stronger than expected, adding 1.4% for March and accelerating to 6.7% y/y from 5.7% a month earlier and the forecasted 6.1%.

The Bank of Canada last week raised its key rate by 50 points and announced a quantitative tightening in response to accelerating price growth. The fresh batch of data has triggered a new buying spurt in CAD against USD as it opens the door for even more tightening of monetary policy.

Canada is benefitting from a boom in commodity and energy prices, which allows the central bank to pursue a more aggressive policy normalisation than countries that are net importers of these commodities. In this situation, the CAD is getting support from three sides: more money coming into the country, more business activity, and a potentially stricter monetary policy.

The USDCAD is losing 0.75% to 1.2510, and it is trying to break the tie with 200-day MA, which has been resistant for the last two weeks. The important close frontier is 1.2475, where the pair got support in April and January. A consolidation below that might be the first signal to end the corrective bounce of the USDCAD and clear the way to 1.2000, which is the low of May 2021.

The FxPro Analyst Team

The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

Share
Published by
The FxPro Analyst Team

Recent Posts

GBPUSD Wave Analysis 22 November 2024

- GBPUSD broke support zone - Likely to fall to support level 1.2465 GBPUSD currency…

17 hours ago

USDCHF Wave Analysis 22 November 2024

- USDCHF broke resistance zone - Likely to rise to resistance level 0.9000 USDCHF currency…

17 hours ago

Downbeat PMIs Cemented EURUSD’s Fall

The decline in EURUSD was driven by weak PMI figures, with France and Germany both…

17 hours ago

Gold hits new highs in euro

Gold has reached record high in euro above 2600, and growing fast in dollar terms…

21 hours ago

Crypto market buzzing in anticipation of regulatory change

The crypto market is booming as the anticipation of regulatory changes grows. Bitcoin nears $100K,…

23 hours ago

GBPCAD Wave Analysis 21 November 2024

- GBPCAD broke support zone - Likely to fall to support level 1.7500 GBPCAD currency…

2 days ago

This website uses cookies