Daily Updates

The Canadian dollar touched a three-month high (USD/CAD low) on Thursday after lower-than-expected CPI inflation numbers were reported in the US on Wednesday. However, the Canadian dollar’s momentum quickly dissipated. This appears to be more a case of broad US Dollar weakness rather than Canadian dollar strength, as the broader USD index has lost 1.6% to date in June. The weakening US dollar is a result of increased expectations that the FED will begin its rate-cutting cycle in September, with the market pricing in approximately a 90 percent chance that the FED will cut rates in September (up from about 70% on Wednesday). This view was further reinforced by Chicago FED President Austan Goolsbee, whose dovish comments on Thursday indicated that, in his opinion, the US economy is on track to reach 2% inflation. These are some of the first signals from policymakers that a rate cut is coming.

As the expression goes, “when the US sneezes, Canada catches a cold.” Well, when US inflation cools substantially, the Canadian dollar gains. This morning’s US consumer price index (CPI), a measure of goods and services costs across the economy, fell year-over-year to 3%. This is a more rapid cooling than the 3.1% economists had expected.

Another quiet day in a generally quiet week for the Canadian dollar. The overall market direction has been incremental gains for the Canadian dollar versus the US dollar, mostly based on the perception that the Federal Reserve is inching ever closer to a rate cut in September, with markets currently betting that there is a 70% chance of this happening by then. This has helped alleviate some market concerns about the BoC getting too far ahead of the FED with respect to interest rate differentials.

The Canadian Dollar (CAD) is expected to face several influencing factors throughout the summer, with various economic indicators and monetary policy decisions playing pivotal roles. Here’s a comprehensive look at...

The Canadian Dollar has had an interesting week and has shown surprising resilience against a broadly stronger US Dollar as of late. Heading into the Canada Day long weekend, we…

This morning, hawkish comments by a Fed Governor have once again taken center stage. This time, it was comments by Governor Bowman, who indicated yesterday that interest rates should stay...

With a light week in terms of economic data, the Canadian dollar has been treading water for the first few days of this week, trading between 1.3690 and 1.3790 versus the US dollar. However, the latter half of the week includes the Bank of Canada’s (BoC) latest Summary of Deliberations, slated to be released on Wednesday, as well as Canadian Retail Sales coming out on Friday.

Wednesday morning’s US inflation report, the consumer price index (CPI), indicated that inflation rose by 3.3% annually last month, while core prices climbed by 3.4%. This marks the smallest year-over-year increase since 2021. The cooling inflation could boost the likelihood of the Federal Reserve cutting interest rates later this year, especially as the Fed concludes its policy meeting today.

With global political uncertainty abound after the surprising EU Parliament elections, which saw far-right parties gaining across most European nations, financial markets are taking a risk-off approach this morning. The most notable results were in France, where President Macron called a snap election for the end of June in what is being described as an all-or-nothing gamble.

The Canadian dollar is drifting within a narrow range against the USD during Monday’s trading session. Markets are looking past weaker-than-expected manufacturing numbers published on Monday from both north and south of the border as they focus on the Bank of Canada’s interest rate announcement on Wednesday, June 5th.