Canadian Dollar treads water on Monday, BoC CPI inflation around the corner

  • Canadian Dollar mostly higher but flat against Greenback again.
  • Canada brings BoC CPI inflation to the table on Tuesday.
  • Fedspeak dominates headlines, CAD volumes thin on holiday Monday.

The Canadian Dollar (CAD) was broadly higher on Monday before a moderating pullback halfway through the American trading session. Momentum remains limited with Canadian markets shuttered for the Victoria Day holiday. CAD traders will officially kick the trading week off on Tuesday, just in time for the Bank of Canada’s (BoC) latest Consumer Price Index (CPI) inflation.

Canada is taking the day off, leaving Fedspeak the key market force on Monday as Federal Reserve (Fed) officials make a slew of appearances. Fed policymakers are walking a fine line between hawkish and bullish as the US central bank tries to balance sky-high market expectations for rate cuts with a mixed data outlook. The Fed remains concerned that inflation could remain a tricky problem to solve, but investors are adamant that the Fed is due for a first rate cut in September.

Daily digest market movers: Canadian Dollar finds room to grow, but limited against Greenback

  • Canadian Dollar recovers ground, but Greenback takes top spot on Monday, climbing higher and further.
  • Fed speakers flood the newswires on Monday, stressing the need for patience on rate moves with inflation expected by Fed staff to remain too high for too long.
  • Canada’s CPI inflation for the year ended April is expected to tick down to 2.7% from 2.9%.
  • The BoC’s own Core CPI inflation tracker last came in at 2.0% YoY.
  • Tuesday will feature even more Fed appearances, filling investors’ views.
  • Fed officials speak cautiously on policy outlook after April inflation report

Canadian Dollar PRICE Today

The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the New Zealand Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.03% -0.08% 0.30% 0.02% 0.28% 0.36% 0.02%
EUR -0.03% -0.15% 0.31% -0.01% 0.28% 0.34% -0.01%
GBP 0.08% 0.15% 0.32% 0.14% 0.42% 0.47% 0.13%
JPY -0.30% -0.31% -0.32% -0.29% -0.01% 0.08% -0.27%
CAD -0.02% 0.00% -0.14% 0.29% 0.22% 0.34% 0.00%
AUD -0.28% -0.28% -0.42% 0.01% -0.22% 0.05% -0.29%
NZD -0.36% -0.34% -0.47% -0.08% -0.34% -0.05% -0.34%
CHF -0.02% 0.00% -0.13% 0.27% -0.00% 0.29% 0.34%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).

Technical analysis: Canadian Dollar high, but Greenback even higher

The Canadian Dollar (CAD) gained ground against nearly all of its major currency peers, but buying pressure evaporated, leaving the CAD in middle ground on Monday. On the low side, the CAD shed around a tenth of a percent against the market’s Monday top performers, the Pound Sterling (GBP) and the US Dollar (USD).

USD/CAD continues to go sideways in the near term, treading choppy water between 1.3640 and the 1.3600 handle. Intraday price action remains hampered by the 200-hour Exponential Moving Average (EMA) at 1.3646.

Middling technical action threatens to bake into USD/CAD with daily candlesticks stuck between the 50-day and 200-day EMAs at 1.3635 and 1.3548, respectively. The 1.3600 handle remains a key technical barrier, acting as a magnet pulling down bullish momentum and a price floor hobbling further shortside progress.

USD/CAD hourly chart

USD/CAD daily chart

Economic Indicator

Consumer Price Index (YoY)

The Consumer Price Index (CPI), released by Statistics Canada on a monthly basis, represents changes in prices for Canadian consumers by comparing the cost of a fixed basket of goods and services. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Canadian Dollar (CAD), while a low reading is seen as bearish.

Read more.

Next release: Tue May 21, 2024 12:30

Frequency: Monthly

Consensus: 2.7%

Previous: 2.9%

Source: Statistics Canada

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