Inflation figures in Canada came in higher than expected, though they remain muted. Year over year, prices rose in October by 0.7%, largely as a result the increased cost of housing. The inflation figure was higher than expected. Globally, markets were once again caught up vaccine news as Pfizer confirmed that its vaccine is even more effective than previously thought and moving through the approval process quicker than anticipated. Oil is up on hopes that the January OPEC+ supply increase can be delayed. While the Canadian dollar did not react heavily to any of the news items, the combined effect is that it is higher by 0.2% this morning. The Loonie remains range-bound and is right the middle of where it has been trading for the last three months. As the end of the pandemic in the first half of 2021 comes into sight we expect the exchange rate to become more sensitive to domestic economic conditions and Bank of Canada’s policy decisions.
