23 May 2014
USD/CAD tests 1.0890 post-CPI
FXStreet (Edinburgh) - The USD/CAD is now deflating from session highs in the neighbourhood of 1.0900, dropping to test the lower band of the range near 1.0890.
USD/CAD surrenders gains after data
The CAD grabbed some buying interest after inflation figures in the Canadian economy banged on expectations during the month of April: headline consumer prices rose at an annual pace of 2.0% and 0.3% inter-month while Core prices gained 0.2% MoM and 1.4% over the last twelve months. In the view of Camilla Sutton, Chief FX Strategist at Scotiabank, “with headline CPI at 2% and Core trending higher Governor Poloz will struggle to maintain his dovish tone… Currently, the market is pricing in no risk of an interest rate hike or cut in Canada in the next 12-months, which we think is underpricing the hiking risk (even though this risk is very small)”.
USD/CAD significant levels
At the moment the pair is up 0.01% at 1.0893 and a surpass of 1.0961 (high May 6) would open the door to 1.1001 (21-w MA) and then 1.1007 (high May 2). On the flip side, the initial support aligns at 1.0851 (low May 18) ahead of 1.0814 (low May 8) and finally 1.0762 (low Jan.8).
USD/CAD surrenders gains after data
The CAD grabbed some buying interest after inflation figures in the Canadian economy banged on expectations during the month of April: headline consumer prices rose at an annual pace of 2.0% and 0.3% inter-month while Core prices gained 0.2% MoM and 1.4% over the last twelve months. In the view of Camilla Sutton, Chief FX Strategist at Scotiabank, “with headline CPI at 2% and Core trending higher Governor Poloz will struggle to maintain his dovish tone… Currently, the market is pricing in no risk of an interest rate hike or cut in Canada in the next 12-months, which we think is underpricing the hiking risk (even though this risk is very small)”.
USD/CAD significant levels
At the moment the pair is up 0.01% at 1.0893 and a surpass of 1.0961 (high May 6) would open the door to 1.1001 (21-w MA) and then 1.1007 (high May 2). On the flip side, the initial support aligns at 1.0851 (low May 18) ahead of 1.0814 (low May 8) and finally 1.0762 (low Jan.8).