The Canadian Dollar was rescued from month-long lows Wednesday by near-target inflation figures for the month of October but the Loonie will be vulnerable to the U.S. Dollar and Pound Sterling in the weeks ahead because the Bank of Canada (BoC) is edging closer to cutting its cash rate.
Canadian inflation rose 0.3% in October, in line with the market consensus, which kept the annualized rate of price growth steady at 1.9%. Meanwhile, once gasoline was excluded from the goods basket, inflation rose by 2.3% last month after dropping 10 basis points from September’s level.
The BoC’s various measures of core inflation, which are thought to provide a better reflection of underlying trends by eliminating the most volatile items from the goods basket, all continued to average the 2% target last month.
Canada’s dollar retreated from a November low against the U.S. greenback and Sterling in response to the figures although neither move was sustained for long.
USD/CAD SHORT (Sell)
ENTER AT: 1.3309