The Canadian Dollar (CAD) strengthens sharply against the US Dollar (USD) on Tuesday, drawing support from softer-than-expected US inflation data and rising Oil prices amid escalating tensions in the Middle East.
At the time of writing, USD/CAD trades around 1.4055, its lowest level since June 17, down nearly 0.70% on the day
The US Dollar came under broad selling pressure after the latest Consumer Price Index (CPI) data showed inflation cooling more than expected. The US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, trades around 100.75, retreating from an intraday high of 101.32. US CPI fell 0.4% MoM in June after rising 0.5% in May.
Markets had expected a smaller decline of 0.1%. Annual inflation slowed sharply to 3.5% from 4.2%, below the 3.8% forecast. Core CPI, which excludes volatile food and energy prices, was flat on a monthly basis, against expectations for a 0.2% increase.