Canada’s July CPI rose to 3.0% YoY, exceeding forecasts, while crude prices support the Loonie against modest USD strength.
The USD/CAD pair remains near 1.3870, unchanged on the day, as rising oil prices and stronger-than-expected Canadian inflation offset safe-haven USD demand. The pair failed to extend gains after bouncing from its 200-day SMA near 1.3845, the lowest since June 3.
Canada’s July CPI climbed 0.5% MoM and 3.0% YoY, surpassing the 2.9% forecast and June’s 2.8% reading. The BoC’s core CPI also rose to 2.3% YoY from 2.1%, though the central bank is expected to hold rates steady for the remainder of 2024. Geopolitical tensions, including US-Iran standoffs, have bolstered USD demand, capping further losses in the pair.
Traders remain cautious amid mixed signals, with oil-driven Loonie strength balanced against broader USD resilience.