Canadian Dollar Rises as CPI Surges

The Canadian dollar gained today after the report showed that the inflation growth was stronger than anticipated, renewing talks about possible interest rates hike on the next meeting of the central bank policy makers.

The consumer prices in Canada rose 0.8 percent from February to March, on a seasonally adjusted monthly basis, the largest increase since October 2010. The composite leading index posted the increase by 0.8 percent in March, following the 1.1 percent gain in February. The expected growth was 0.5 percent.

The one-year overnight index swap rate, which shows the average overnight rate anticipated by investors, rose to 1.37 percent after it earlier reached 1.4 percent, the biggest gain since September. The Bank of Canada kept its key rate unchanged since September. The next policy meeting of the BoC will occur on May 31.

USD/CAD dropped from 0.9642 to 0.9561 as of 21:51 GMT today. CAD/JPY went up from 85.66 to 86.32.

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