Loonie Strengthens After Strong Canadian Inflation Data
February 23 2018 - 4:33AM
RTTF2
The Canadian dollar moved up against its major counterparts in
the European session on Friday, following the release of a data
showing improving domestic consumer inflation in January.
Data from Statistics Canada showed that consumer prices grew 0.5
percent on a seasonally adjusted monthly basis, after rising 0.1
percent in December.
Economists were looking for a 0.5 percent rise.
On year, the consumer price index rose 1.7 percent on an
unadjusted basis, following a 1.9 percent increase in
December.
This was higher than the 1.5 percent advance seen by
economists.
Excluding energy, the CPI increased 1.7 percent, matching
the gain in December.
Meanwhile, oil prices dropped amid a stronger dollar as well as
on profit taking ahead of the weekly U.S. rig count report from
Baker Hughes due later today.
Crude for April delivery fell $0.03 to $62.74 per barrel.
Investors focus on a slew of Fed speeches for further insight on
inflation and interest rates.
While Cleveland Fed President Loretta Mester and Kansas City Fed
President Esther George discuss the objectives of monetary policy
on a panel at the Chicago Booth School of Business event organized
in New York, New York Fed President William Dudley and Boston Fed
President Eric Rosengren will speak about the balance sheet and Fed
policy.
The loonie has been trading higher against most major rivals in
the Asian session amid rising appetite, as U.S. government debt
yields fell from multiyear highs reached on Wednesday, helping ease
worries over inflation and higher interest rates.
The loonie firmed to a 3-day high of 1.2614 against the
greenback, after falling to 1.2725 at 12:15 am ET. The next
possible resistance for the loonie is seen around the 1.22
mark.
The loonie edged up to 84.57 against the yen, from a low of
83.94 hit at 5:00 pm ET. The loonie is likely to find resistance
around the 87.5 level.
Data from the Bank of Japan showed that Japan producer prices
rose 0.7 percent on year in January.
That was shy of expectations for a gain of 0.8 percent, which
would have been unchanged from the previous month.
The loonie climbed to a 9-day high of 0.9871 against the aussie,
following a decline to 0.9970 at 5:00 pm ET. If the loonie rises
further, it may find resistance around the 0.98 level.
Having fallen to 1.5675 against the euro at 7:15 pm ET, the
loonie reversed direction and strengthened to a 9-day high of
1.5509. The loonie is seen finding resistance around the 1.52
level.
Final data from Eurostat showed that Eurozone inflation eased as
estimated in January.
Inflation slowed slightly to 1.3 percent in January from 1.4
percent in December.
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