The Canadian dollar reached another low, with Dollar/CAD breaking the very round level. This came after US housing data beat expectations. The US dollar is on the rise across the board and it finds a vulnerable C$.
A confirmation for the breakout is still needed. The high is 1.3006 and the pair immediately dropped just below this level.
Canadian inflation came out a bit stronger than predicted, but it seems the market was edging to test the very round level. Core CPI is at 2.3% y/y and headline inflation at 1%.
The biggest blow to the loonie came from the Bank of Canada. The BOC cut the interest rate to 0.50% earlier in the week, in a move that wasn’t fully priced in by markets. Solid core inflation seems to have little effect on the BOC.
Opinion: USD/CAD: Where To Target Further Upside Or Correction S/T? – SocGen
Here is how it looks on the chart:
