Photo by on
The USD/CAD pair extends the rally to around 1.3745 during the early Asian session on Friday. The hotter-than-expected US inflation data and hawkish comments by Federal Reserve (Fed) officials provide some support to the Greenback ahead of the US September Producer Price Index (PPI) and Canadian job data.
The US inflation was higher than forecast in September, while jobless claims posted an unexpected jump. Data released by the US Department of Labor Statistics on Thursday showed that the Consumer Price Index (CPI) rose 2.4% YoY in September, compared to 2.5% in August. The figure came in above the consensus of 2.3%. The core CPI, excluding food and energy, climbed 3.3% YoY in September, above forecast and the previous reading of 3.2%.
Meanwhile, the US Initial Jobless Claims for the week ending October 4 rose to 258K, up from the previous week’s 225K. The figure was above the initial consensus of 230K.
Though the inflation reading was hotter than expected, traders in futures markets increased their bets that the Fed would lower rates by 25 basis points (bps) in the November meeting, pricing in nearly 86%, according to the CME FedWatch Tool.
On the Loonie front, the Canadian job report will be published later on Friday. The Unemployment Rate is projected to rise from 6.6% in August to 6.7% in September. The rising unemployment rate and easing inflation to the target range might trigger the faster and larger interest rate cut from the Bank of Canada (BoC). This, in turn, exerts some selling pressure on the Canadian Dollar (CAD) and acts as a tailwind for the USD/CAD pair. More By This Author:Australian Dollar Extends Decline As Traders Brace For US CPI Data WTI Holds Below $73.50 As Middle East Tensions Ease Australian Dollar Gathers Strength After RBA Minutes
