All eyes were on April inflation numbers in the US this morning and it came in hotter than expected. Core inflation showed that prices increased 3% from April 2020 and 0.9% last month. The respective expectations were for 2.3% and 0.3%. The reaction in the currency markets was volatile. The US dollar spiked briefly on the view that a hotter-than-expected inflation report could force the Federal Reserve to tighten monetary policy sooner than telegraphed. But then those who view the inflation spike as transitory and not high enough to force the Fed to move off of its staunchly easy money policies regained the upper hand and commodity currencies like the Canadian dollar regained continued their move up against the US currency. USD to CAD is volatile but now sits only half a penny away from 1.20 level which it has not seen since December of 2014. April inflation figures in Canada will be released tomorrow morning.
