Weaker-than-expected Canadian inflation data drives the CAD lower, lifting USD/CAD to near 1.4060 on Monday.
USD/CAD climbed to 1.4060 on Monday, recovering from below 1.4000 as the Canadian Dollar weakened after softer domestic inflation data. The move reflects investor concerns over slower price growth in Canada, reducing expectations for further monetary tightening by the Bank of Canada.
The pair had traded below 1.4000 earlier in the session before the inflation report. The US Dollar Index (DXY) also gained 0.2%, hovering near 101.00, adding upward pressure on USD/CAD. Market consensus had anticipated a stronger inflation print, but the data fell short, weighing on the Loonie.
No immediate market reaction beyond the currency pair’s movement was reported, though traders may reassess rate hike probabilities for Canada in the near term.