The Canadian Dollar hits weekly lows as US CPI inflation outperforms projections
The Canadian Dollar Takes a Hit Against the US Dollar
US Inflation Surprises Investors
The Canadian Dollar (CAD) has fallen against the US Dollar (USD) due to a strong reading for the US Consumer Price Index (CPI) inflation. This has caused the USD/CAD pair to reach 1.3670, while the DXY US Dollar Index rises in the US market session.
Concerns About the Federal Reserve
Investors were hoping for a decrease in US CPI, but it remained steady in September. This has raised concerns that the Federal Reserve (Fed) might increase interest rates even more. As a result, traders are turning to the safe haven of the USD, causing the CAD to reach its lowest point of the week.
US Economic Data Beats Expectations
US CPI inflation for September increased by 0.4% compared to the previous month, which was less than the expected 0.6% but higher than the market’s anticipated 0.3%. The annual figure for September also exceeded expectations, remaining steady at 3.7% instead of the forecasted 3.6%. Additionally, US Initial Jobless Claims remained unchanged at 209K.
Canadian Data Absent
There is no significant economic data scheduled for the rest of the week in Canada. The only notable data released recently was Wednesday’s Building Permits, which showed a surprising increase of 3.4% compared to the expected 0.5% and the previous decline of 3.8%.
Crude Oil Prices Struggle
Following the US CPI data, Crude Oil prices are having difficulty gaining strong support. This lack of support is further impacting the value of the Canadian Dollar.
Overall, the Canadian Dollar has weakened against the US Dollar due to strong US inflation data and concerns about potential rate hikes by the Federal Reserve.