Canadian Dollar Strengthens After Upbeat Inflation Data
18 January 2019 - 8:41PM
RTTF2
The Canadian dollar gained ground against its key counterparts
in the European session on Friday, after a data showed that the
nation's consumer inflation turned positive unexpectedly in
December, triggering hopes for a rate hike by the Bank of Canada in
coming months.
Data from Statistics Canada showed that the CPI rose 0.2 percent
on a seasonally adjusted monthly basis from last month, when it
fell a revised 0.1 percent. Economists had forecast a 0.4 percent
drop.
Core inflation, which excludes food and energy, improved 0.4
percent from 0.1 percent in the previous month.
On an unadjusted basis, consumer prices rose 2.0 percent
year-on-year in December, following a 1.7 percent increase in
November.
Oil prices rose as reports of progress in U.S.-China trade talks
helped ease global growth worries.
Crude for February delivery rose $0.63 to $52.70 per barrel.
The loonie traded mixed against its major counterparts in the
Asian session. While it rose against the yen and the greenback, it
held steady against the euro and the aussie.
The loonie strengthened to a 3-day high of 1.3232 against the
greenback, from a low of 1.3283 hit at 7:15 pm ET. On the upside,
1.30 is likely seen as the next resistance for the loonie.
The loonie advanced to a 2-day high of 1.5088 against the euro,
after having dropped to 1.5143 at 8:15 am ET. If the loonie rises
further, 1.49 is possibly seen as its next resistance level.
Data from the European Central Bank showed that Eurozone current
account surplus decreased in November, led by a decline in the
surplus in the visible trade and primary income accounts and
worsening of the deficit in the secondary income account.
The current account surplus declined to EUR 20 billion from EUR
27 billion in October. The surplus was EUR 35 billion in the same
month last year.
The loonie firmed to 82.69 versus the yen, its strongest level
since December 20, 2018. This follows a low of 82.11 touched at
6:15 pm ET. The loonie may possibly challenge resistance around the
84.00 area.
Data from the Ministry of Internal Affairs and Communications
showed that Japan consumer prices rose 0.3 percent on year in
December.
That was in line with expectations and down from 0.8 percent in
November.
Reversing from an early low of 0.9562 against the aussie, the
loonie edged up to 0.9522. The loonie is likely to test resistance
around the 0.94 area.
Looking ahead, the University of Michigan's preliminary consumer
sentiment for January is scheduled for release shortly.
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