The USDCAD currency pair was trading almost flat for the day after the release of Canadian inflation data in the early American session. The Canadian monthly CPI data released by Statistics Canada came in at 0.4%, meeting analysts' expectations and falling from last month's 0.7%.
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The median Canadian CPI also came in at 3.9% annually, beating analysts' consensus estimates of 4.0% and marking a decline from last month’s figure of 4.3%. The trimmed CPI figure also beat consensus estimates by coming in at 3.8% versus expectations of 3.9% and the previous figure of 4.2%.
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The currency pair initially headed higher on the weak Canadian inflation data as investors factored in the latest rate hike from the Bank of Canada to combat persistent inflation in the country following two monetary policy meetings at which the BoC held rates steady.
Investors' expectations of another rate hike from the BoC helped boost the Canadian dollar since many analysts still expect the central bank to hike rates by 25 basis points at its July meeting despite today's soft inflation data.
The USDCAD currency pair was headed higher as the US dollar gained ground against the Canadian dollar, boosted by today's upbeat durable goods orders data. The core US durable goods orders came in at 0.6% beating analysts' estimates of 0.0%, while the headline print was recorded at 1.7% versus analysts’ estimates of a 0.8% contraction.
Investor expectations that the Fed could hike rates at its July meeting after leaving them unchanged at its June meeting also drove the greenback higher. Despite the move higher by the currency pair, the overall outlook for the USDCAD remains bearish.
The loonie’s weakness was further driven by the weakening of global crude oil prices as tracked by the West Texas Intermediate (WTI), which has fallen today and yesterday. The Canadian dollar, also known as the loonie, is also impacted by crude oil prices since the country exports a lot of oil as a foreign exchange earner.
Investors are also looking forward to releasing the US Conference Board consumer confidence data, which could further boost the pair.Â
*This is not investment advice.
The USDCAD price chart.
The USDCAD currency pair was trading sideways as the US dollar tried to rally against its Canadian peer.
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