Canadian Dollar Strengthens After Inflation Data
19 Giugno 2019 - 11:52AM
RTTF2
The Canadian dollar gained ground against its major counterparts
in the European session on Wednesday, as a data showed that
nation's inflation was flat in May, reducing chances for a rate cut
by the Bank of Canada as other major central banks lower rates.
Data from Statistics Canada showed that the CPI rose 0.3 percent
on a seasonally adjusted monthly basis in May, unchanged from the
previous month. Economists has expected a 0.1 percent increase.
Core inflation, excluding food and energy, ticked up 0.3 percent
in May, after rising 0.2 percent in April.
On an annual basis, consumer prices rose an unadjusted 2.4
percent from 2.0 percent in April. The rate was forecast to
increase by 2.1 percent.
The data cheered investors by lessening chances for a Bank of
Canada rate cut in the future.
All eyes are on the outcome of the FOMC meeting amid increased
expectations for dovish remarks.
With trade tensions threatening global growth, it is expected
that the U.S. central bank would follow the lead of the European
Central Bank and open the door to future rate cuts.
The currency held steady against its major counterparts in Asian
trading, excepting the yen.
The loonie firmed to a 4-week high of 1.4942 against the euro
from Tuesday's closing value of 1.4972. The loonie is poised to
face around resistance the 1.47 region.
Data from Destatis showed that Germany's producer price
inflation slowed in May.
Producer prices climbed 1.9 percent year-on-year in May, after a
2.5 percent increase in April. Economists had expected a 2.2
percent rise.
The loonie that ended yesterday's trading at 1.3376 against the
greenback strengthened to a 5-day high of 1.3337. The loonie is
likely to challenge resistance around the 1.31 mark.
The Canadian currency hit a session's high of 0.9161 against the
aussie, from a low of 0.9204 seen at 8:00 pm ET. At yesterday's
close, the pair was worth 0.9198. The next possible resistance for
the loonie is seen around the 0.89 area.
Data from Westpac showed that Australia's leading index dropped
further in May and remained consistently negative for the past six
months.
The Westpac- Melbourne Institute Leading Index that indicates
likely pace of economic activity over the next nine months,
declined to -0.45 percent in May from -0.49 percent in April.
Reversing from a low of 80.92 touched at 3:00 am ET, the loonie
bounced off to hit a 5-day high of 81.33 versus the yen. The loonie
is seen finding resistance around the 83.5 level.
Data from the Ministry of Finance showed that Japan had a
merchandise trade deficit of 967.1 billion yen in May.
That exceeded expectations for a shortfall of 1,207.0 billion
yen following the 110.9 billion yen deficit in April.
Looking ahead, European Central Bank President Mario Draghi will
give closing remarks at the ECB Forum on Central Banking in Sintra
at 10:00 am ET.
At 2:00 pm ET, the Fed announces its decision on interest rate.
Economists widely expect it to keep federal funds rate at 2.25 -
2.50 percent.
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