Canadian Dollar falls after inflation miss as safe-haven US Dollar demand persists
- Annual inflation in Canada accelerates to 2.8% in April but remains slightly below market expectations.
- Bank of Canada core inflation measures continue to ease, reinforcing the idea of gradual disinflation.
- The US Dollar remains supported by safe-haven demand linked to Middle East tensions and resilient private employment data.
USD/CAD moves higher on Tuesday and trades around 1.3760 at the time of writing, up 0.17% on the day, as the Canadian Dollar (CAD) struggles to fully benefit from higher Oil prices. West Texas Intermediate (WTI) trades at $102.70, up 0.60% on the day, which would normally support the Canadian currency given the importance of energy exports to the Canadian economy.
Data released on Tuesday showed that inflation in Canada accelerated in April. The Consumer Price Index (CPI) rose by 2.8% YoY, compared with 2.4% previously, although it came in slightly below market expectations. On a monthly basis, prices increased by 0.4%.
However, the Bank of Canada (BoC) preferred core measure used to assess underlying inflationary pressures continued to show signs of easing. BoC Core CPI slowed to 2.1% YoY from 2.5%. Together, these figures suggest that inflationary pressures remain relatively sticky but continue to follow a gradual downward trend.
Meanwhile, the US Dollar (USD) maintains a broader bullish bias. Investors continue to favor safe-haven assets as geopolitical tensions surrounding Iran fuel risk aversion. Reports of explosions on Iran’s Qeshm Island and concerns about reduced traffic through the Strait of Hormuz continue to raise fears about global energy supply disruptions.
US data released earlier also supported the Greenback. ADP Employment Change showed that private employers in the United States (US) added an average of 42.25K jobs per week in early May, up from 33K previously, signaling an improvement in private-sector hiring momentum.
Despite the rise in Oil prices, the combination of a firmer US Dollar and Canadian inflation that did not accelerate enough to significantly alter monetary policy expectations appears to be maintaining upward pressure on USD/CAD.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.37% | 0.25% | 0.16% | 0.20% | 0.85% | 0.67% | 0.50% | |
| EUR | -0.37% | -0.12% | -0.18% | -0.17% | 0.49% | 0.31% | 0.13% | |
| GBP | -0.25% | 0.12% | -0.06% | -0.05% | 0.59% | 0.44% | 0.26% | |
| JPY | -0.16% | 0.18% | 0.06% | -0.00% | 0.64% | 0.48% | 0.31% | |
| CAD | -0.20% | 0.17% | 0.05% | 0.00% | 0.65% | 0.48% | 0.30% | |
| AUD | -0.85% | -0.49% | -0.59% | -0.64% | -0.65% | -0.16% | -0.34% | |
| NZD | -0.67% | -0.31% | -0.44% | -0.48% | -0.48% | 0.16% | -0.18% | |
| CHF | -0.50% | -0.13% | -0.26% | -0.31% | -0.30% | 0.34% | 0.18% |
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).
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Past performance is not a reliable indicator of future performance and/or results. Forward-looking scenarios or forecasts are not a guarantee of future performance. Actual results may differ materially from those anticipated.
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