Canadian Dollar Dives on CPI Surprise, Market Eyes Earlier BoC Rate Cut
| Action Insight Mid-Day Report 3-19-24 |
Canadian Dollar Dives on CPI Surprise, Market Eyes Earlier BoC Rate Cut |
Canadian Dollar falls sharply in early US session, triggered by an unexpected decline in Canada's headline CPI and a more significant than anticipated slowdown in core inflation measures. This trend of disinflation is likely to reassure BoC that its efforts to curb inflation are bearing fruit, possibly at a quicker pace than initially projected. The fresh data has fueled market speculation that BoC might advance its timeline for rate cuts to the second quarter of the year, rather than in the third quarter. Meanwhile, Yen is trading as the day's weakest performer, facing steeper sell-off following BoJ's landmark decision to hike interest rates for the first time in 17 years. The market's reaction suggests a perception that, despite its symbolic significance, this rate hike could be a one-off event within the context of a broader overhaul of the monetary policy framework, rather than marking the beginning of a consistent tightening cycle. The Australian Dollar ranks as the second weakest, reflecting investor perception of a less hawkish statement from RBA than some had anticipated. Conversely, Swiss Franc outperformed as the day's strongest currency, followed closely by Dollar and then Euro. It's important to note, however, that Franc's rise is more indicative of a recovery from key support levels against Dollar, Euro, and Sterling, rather than a signal of intrinsic strength... |
USD/CAD Mid-Day Outlook Daily Pivots: (S1) 1.3519; (P) 1.3536; (R1) 1.3550; More... USD/CAD's break of 1.3605 resistance suggests that whole rise from 1.3176 is resuming. Intraday bias is back on the upside for 61.8% projection of 1.3176 to 1.3540 from 1.3419 at 1.3644 first. Decisive break there could prompt upside acceleration to 100% projection at 1.3783 next. On the downside, below 1.3527 minor support will turn intraday bias neutral first. But outlook will stay bullish as long as 1.3419 support holds. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 03:30 | AUD | RBA Interest Rate Decision | 4.35% | 4.35% | 4.35% | | 03:36 | JPY | BoJ Interest Rate Decision | 0.10% | 0.00% | -0.10% | | 04:30 | AUD | RBA Press Conference | | 04:30 | JPY | Industrial Production M/M Jan F | -6.70% | -7.50% | -7.50% | | 07:00 | CHF | Trade Balance (CHF) Feb | 3.66B | 3.50B | 4.74B | 4.70B | | 08:00 | CHF | SECO Economic Forecasts | | 10:00 | EUR | Germany ZEW Economic Sentiment Mar | 31.7 | 21 | 19.9 | | 10:00 | EUR | Germany ZEW Current Situation Mar | -80.5 | -80 | -81.7 | | 10:00 | EUR | Eurozone ZEW Economic Sentiment Mar | 33.5 | 25.4 | 25 | | 12:30 | CAD | CPI M/M Feb | 0.30% | 0.60% | 0.00% | | 12:30 | CAD | CPI Y/Y Feb | 2.80% | 3.10% | 2.90% | | 12:30 | CAD | CPI Median Y/Y Feb | 3.10% | 3.30% | 3.30% | | 12:30 | CAD | CPI Trimmed Y/Y Feb | 3.20% | 3.40% | 3.40% | | 12:30 | CAD | CPI Common Y/Y Feb | 3.10% | 3.40% | 3.40% | | 12:30 | USD | Building Permits Feb | 1.52M | 1.50M | 1.47M | | 12:30 | USD | Housing Starts Feb | 1.52M | 1.43M | 1.33M |
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