The US dollar surged this Monday after the release of the manufacturing survey, which indicated that activity in the manufacturing sector expanded for the first time in over a year…
The Canadian dollar is slowly climbing its way back up from its recent multi-month lows against the US Dollar. The Canadian dollar had fallen to 1.3614, its lowest level (CAD/USD highs) against the US Dollar since early December of 2023. In early Tuesday morning trading, the CAD was up by a quarter of a penny and overall had gained back half a penny since it hit its lowest level above-mentioned 3-month lows.
The Canadian dollar lost approximately ¾ of a penny against the US dollar this morning after Statistics Canada announced that on an annual basis, inflation dropped to 2.8 percent in February. This latest Consumer Price Index inflation reading was lower than what markets had expected.
The Canadian dollar has jumped a full cent from Wednesday to Thursday as markets reevaluate the Bank of Canada and Federal Reserve Bank’s respective stances. The market prediction late last year and into January 2024 was that the Canadian economy was on the brink of a downturn and that Canadian consumers, being as stretched as they are, would blink first, leading the BoC to take the lead over the Federal Reserve Bank in initiating the cycle of interest rate cuts. However, over the last month, the storyline has begun to flip, with Wednesday’s comments by both banks further highlighting this change. Fed Chairman Powell indicated that the Fed was planning on cutting rates as long as inflation continued its downward trend. This was the type of speech that was expected from Bank of Canada Governor Tiff Macklem. But the BoC Governor’s speech surprised analysts with its hawkish tone, in which he stated, “underlying inflation pressures persist,” indicating ongoing concerns about inflation.