Canadian dollars, close up. Image source: belchonock © 123RF.com
According to Statistics Canada, the Consumer Price Index in the country has increased by 0.30 per cent in October.
The observed surge in the CPI from the recorded -0.40 per cent in September was expected by market analysts, who projected price stabilisation in the latter part of Q3.
Canada CPI Monthly Change. Image source: TradingEconomics.com
The recorded increase in Canada’s inflationary pressures over the last month did not have a substantial impact on the country’s overall inflation rate, which remains unchanged at its current level of 1.9 per cent.
Thus, inflation in Canada is currently on its third consecutive month of staying at 1.9 per cent, which is close to, but slightly below, the 2 per cent symmetric target level of the Bank of Canada.
Canada Inflation Rate. Image source: TradingEconomics.com
This news has had a largely positive impact on all currency pairs that are comprising of the Canadian dollar.
The US had previously appreciated against its Canadian counterpart over the last two days because of the long-awaited depreciation of the Crude Oil prices, which has commenced yesterday.
The US remains the biggest importer of Crude Oil in the world, and every recorded depreciation in the price of the commodity is generally having a positive impact on the greenback.
It is for that reason that the USDCAD had appreciated by more than 0.60 per cent over the last two days; however, today's release of the inflationary data in Canada has at least momentarily curbed the pair's sudden bullish sentiment.
Because of the expected stabilisation of the prices in Canada, investors have resumed betting on the strengthening of the Canadian dollar.
The USDCAD depreciated by 0.15 per cent (20 pips) in less than half an hour today following the release of the economic report.
The pair is currently trading at around 1.32864. Its price is likely to consolidate back to just above the minor resistance (now support) at 1.32667.
USDCAD 1D Price Chart. Image source: Trendsharks ©, created with TradingView.com
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