Canadian Dollar Holds Steady Amid Lackluster CPI Data
The Canadian Dollar (CAD) remained stable in midrange territory on Tuesday following the release of underwhelming Canadian Consumer Price Index (CPI) inflation data. Despite the lackluster performance, the CAD failed to gain momentum as markets awaited the Federal Reserve’s (Fed) rate decision scheduled for Wednesday, which has put a pause on significant market movements.
Key Takeaways from Canadian CPI Data:
- August’s headline CPI figure in Canada contracted for the second time in 2024.
- Year-over-year CPI figures fell below expectations.
- The Bank of Canada’s (BoC) core CPI inflation measure also decreased on an annualized basis.
Daily Digest of Market Movers:
- Canadian CPI data for August disappointed, limiting the CAD’s potential ahead of the Fed’s anticipated rate cut.
- Headline CPI inflation in Canada dropped to 2.0% year-over-year in August, below the forecasted 2.1%.
- Month-over-month CPI inflation in Canada contracted by -0.2% in August.
- The BoC’s core inflation rate decreased to 1.5% from the previous 1.7%.
- Global markets are focused on the upcoming Fed rate decision, with expectations of the start of a new rate-cutting cycle.
- The Fed is likely to reduce its main reference rate by 25-50 basis points, the first cut in over four years.
Canadian Dollar Price Today
The table below displays the percentage change of the Canadian Dollar (CAD) against major currencies today. Notably, the CAD showed strength against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.13% | 0.40% | 1.04% | 0.07% | -0.08% | 0.23% | 0.23% |
Canadian Dollar Price Forecast
The Canadian Dollar (CAD) continues to face challenges in the FX markets. Despite efforts to find stability, the CAD struggles against the USD, with USD/CAD hovering near the 200-day Exponential Moving Average.
The USD/CAD pair is pivotal at the 1.3600 level, with the CAD lacking bullish momentum to push through. This stagnation has led to a sideways trend in the currency pair.
Forex FAQs: Canadian Dollar Insights
Here are some key factors driving the Canadian Dollar (CAD) and influencing its performance:
- Interest rates set by the Bank of Canada (BoC)
- Oil prices, Canada’s major export
- Economic health indicators
- Inflation rates
- Trade balance